The end of the Petro, a state cryptocurrency based on blockchain technology that guaranteed support for national oil and gold and launched with a massive promotional effort by the government of Nicolás Maduro, is nearing its end. In the economic and financial sources discussed, the monetary instrument is assumed to die little by little, on its way to its final liquidation, presumably after the completion of commitments linked above all to the commercial sector with loans and creditors.
Since the end of May, as reported by users, the Petro Blockchain has started functioning erratically and the #PetroApp platform is showing glitches. The PDVSA-Crypto corruption plot was built around a network of senior officials linked to Tarek El Aissami, who until last February was president of Petroleos de Venezuela (PDVSA) and vice president of the Maduro government’s economic sector. The fundamental reasons for this manifold failed experiment in Chavismo public policy.
The Petro (PTR) cryptocurrency was launched in 2017 to great fanfare, after the collapse of the exchange economy and price controls. It was conceived as a tool to trade assets and capitalize on resources, its support considered the large certified international oil reserves in the country. Many users of Chavismo’s social environment are connected to the Patria system [plataforma virtual creada para que la población cobre salarios y ayudas] In order to save property, they devoted themselves to the gradual exchange of bolivars for pedros encouraged by official propaganda. Also entrepreneurs and business chains.
Consolidating its presence as a form of payment in some official digital transactions, its implementation was gradual, and it was mandated as a reference unit after Maduro’s second cash change in tax and diplomatic services. Its birth was accompanied by a very active campaign by the official ruling party to promote its use and make it known among the people, and in 2018 cryptocurrencies took off in a big way in the country. Tarek El Aissami convinced Maduro that cryptocurrencies were a great tool to circumvent international sanctions, which were already in place at the time, and to give oxygen to a collapsing economy.
Joselit Ramirez, head of the National Watchdog of Crypto Assets, who is personally and politically close to El Issamy, is in jail today. Hugbel Roa, a friend of El Eissamy and also a prisoner, Minister of Science and Technology and University Education, presented and accepted the Petro plan in late 2017. An extensive network of corruption wiped out a significant portion of Sunagrip’s (national watchdog of cryptoassets) technical staff. Now, a new board of the company has been appointed under the leadership of Anabel Pereira.
The limited way to operate the petro, based on its centralized nature, conspired against its operational utility from the start. Its promotion team also lacks credibility. „A petro is not a bitcoin, you need to mine to verify transactions. It’s a mechanism with a ceiling,” explains financial analyst Henkel Garcia. „In order for this process to be reliable, especially in a government with many credibility problems, it is necessary to provide a means of exchange. The petro is more accepted by an arbitrage game, which can be bought cheaply on the secondary market, but not much”.
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García points out that the dollarization of the Venezuelan economy in 2018 made part of Petro’s strategic orientation as an international resource collector lose some weight. „The Petro was restarted six or seven times before what happened today.” „Cryptocurrencies became a tool for a group of corrupt Chavista politicians to expropriate the little money left in Petroleos de Venezuela,” says economist Omar Zambrano. International sanctions against the Maduro government forced the Chavista hierarchy to conduct „dark” business operations and sell oil irregularly. Transactions with cryptocurrencies made it possible to divert resources into the pockets of Tarek El Aissami’s management team.
A report released by Transparencia Venezuela, an anti-corruption NGO, says that Petroleos de Venezuela, under El Issamy’s command, gave the cryptocurrency watchdog the responsibility for commercializing Venezuelan crude oil. In its wake, the National Association of Cryptoactives has issued a statement lamenting the progressive decline and fall of the petro, saying it sends „a very negative message to the national and international community.”