Venezuelan president continues to dictate the usage of the troubled Petro
In another attempt to save the nation’s troubled cryptocurrency, Petro, Venezuelan president Nicolas Maduro stated that any individual who purchases Petro until the end of this year will have the capacity to convert it to another cryptocurrency. However, the statement still left traders critical and uncertain if Petro is worth investing at all. Since its introduction, Petro faced a multitude of challenging issues, which eventually led Maduro to search for someone to buy it out.
Venezuelan government was initially looking at Petro as a “savior” of their economic troubles following the outrageous hyperinflation. At some point, things in the country got so bad that a lot of citizens were not even able to buy themselves food or water. Out of all solutions available, Venezuelan President Nicolas Maduro chose crypto. However, instead of relying on stable cryptocurrencies that have been already established on the market and earned people’s trust, the Venezuelan government decided to come up with their own, called the Petro, presumably backed by oil.
“The Bolivarian Republic of Venezuela ensures that it will acknowledge Petro’s as a type of installment of national taxes, expenses, commitments, and public services, taking as a source of perspective the cost of the barrel of the Venezuelan container of the earlier day with a rate markdown of DV,” the first whitepaper of Petro read.
However, in reality the Petro turned out to be contradicting to all the base principles of the cryptocurrency itself and cannot be even considered an actual “crypto,” experts say.
Some of the major “red flags” include the absence of the actual incentive behind Petro, since underlying guarantees on oil backing remain unclarified and low, as well as the attempt of the government to establish certain times to “exchange, sell or get an advantage” of Petro. Due to these and some other “red flags,” a lot of financial analysts do not consider Venezuelan Petro an actual cryptocurrency, and it’s only a matter of time when it’ll fall flat.