Venezuelan Cryptocurrency ‘petro’

Venezuela is a beautiful country that has Angels Falls, which is the highest waterfall in the world. And the country is a natural habitat for diverse wildlife. The country has produced six Miss World winners. And Now it has largest oils reserves and tops the rankings.

On the other hand, economic growth of the country plummeted, and the local currency value is suffering from hyperinflation. It is struggling with sanction from United States of America and European Union. A year ago, in December 2016, the president Nicolas Maduro tried to pull-off things the way India does by canceling the largest denomination 100-bolivar. But the plan failed without any use.

Now a Cryptocurrency

The president wants to sell a Cryptocurrency called petrol. Each unit of petrol would be backed by and pegged at the same price of one unit of Venezuelan oil. And there will be a creation of a total of 100 million petro tokens. If you look at the price of a barrel of Venezuelan oil, which is around 59 USD, it would raise 6 Billion USD. Maduro said the new currency will be issued through online exchanges. And it will be sold for fiat currencies. Over a Million citizens enthusiastically registered through government’s portal for mining the new coin. But only to discover in a later announcement that the Cryptocurrency will be a total pre-mine.

On the other side, the other half of the parliament, the opposition party, has declared the Cryptocurrency to be illegal. And said it is a scheme to mortgage the country’s oil reserves. And there are speculations floating around that the petro will have poor value without any investors. Some claim that the Cryptocurrency will only be around until the current president finishes his elected period.

Is the petro a real Cryptocurrency?

Basically, Bitcoin is the most trusted Cryptocurrency. So, if we take the petro and compare it relatively then it is just a digital currency and not a Cryptocurrency. It has no decentralized structure, controlled by the government, and might not need consensus. Although it is likely to launch on Ethereum blockchain the government yet to confirm this or other information like which transaction mechanism would operate. For now, the ultimate plan is unknown

The U.S. Treasury Department has warned that buying or doing any transaction with the petro still violate the sanctions on Venezuela and the government does not support any US citizens in buying the new coin.