• The Petro, Venezuela’s state-backed cryptocurrency, may be “dead” following a corruption crackdown and lack of maintenance.
• The coin was launched in October 2018 and was backed by oil reserves that have yet to be drilled.
• Experts have claimed that the government’s plans for a major remittance tool have been unsuccessful and are now in tatters.
Sun Sets on Venezuela’s Petro – Is the State-backed Crypto Now ‘Dead?’
Background
The Petro was launched in October 2018 as a state-backed cryptoasset backed by oil reserves that had yet to be drilled. It was also intended to become a major tool for remittances and trade.
Crackdown on Corruption
A major crackdown on corruption in March saw the state crypto agency disbanded, resulting in users complaining of “irregular behavior patterns” on the Petro blockchain and flaws with the state-issued PetroApp platform. Additionally, a crypto mining crackdown hamstrung units of the nation’s army involved in mining activities.
Impact
Experts claim that Venezuela’s once-grand crypto plans are now in tatters due to lack of maintenance or development work being done on both the app and blockchain network, as well as an apparent shift towards other priorities from those who are now overseeing crypto operations. International sanctions against the nation may have also played a role in its failure.
Analysis
Financial analyst Henkel García explained that “the Petro is not [like] Bitcoin, which [computers] have to mine to validate transactions…It is an algorithm with a ceiling.” Economist Omar Zambrano added that cryptocurrencies had become instruments of corrupt politicians who wanted embezzle what little money remained at PDVSA.
