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Venezuela has announced how the Petro, Venezuela’s national cryptocurrency, will work. The details include how it will be issued, controlled, backed and how the developer team will be conformed. Venezuela is the country with the highest inflation in the world and cryptocurrencies have been spreading there.

The Petro will be Backed by Barrels of Oil

Each Petro will have the same price as a barrel of oil, Nicolás Maduro, Venezuela’s president announced. On December the 27th, Maduro said that the government will give the necessary lands to start producing oil barrels.

“I will make official the delivery of the first oil field of Ayacucho to be the material base that will sustain this cryptocurrency.” According to Maduro, these oil barrels are internationally certified. The oil field has the possibility to produce 5,000 million oil barrels.

The intention is to search new ways of financing due to the financial restrictions imposed by the United States. Different specialists believe that this cryptocurrency is not a virtual currency but just a different way to issue debt.

Nicolás Maduro - Venezuela's President

Nicolás Maduro – Venezuela’s President

Venezuela has different economic, social and political problems. In order to create a trustful cryptocurrency, it is necessary to have ordered different governmental aspects. If the different developer teams from various cryptocurrencies have much better situations why would the Petro succeed? For example, Venezuela’s currency is backed by oil and it is the most inflationary currency on earth.

According to the official statement, this virtual currency will be backed not only by oil barrels but also by gold, diamond, gas and other precious metals.

The article five reads as follows:

“The owner of the Petro would be able to change the market value of the crypto-asset for the equivalent in another cryptocurrency or in Bolívares at the official exchange rate published by the national crypto-asset exchange house. The holder of the Petro will have a virtual wallet, which will be of his own responsibility, as well as all the associated risks related to its use”

Economic and Political Crisis in Venezuela

Venezuela was once one of the richest countries in America. At the moment, it has been losing its power due to several years of a communist government. Venezuelans suffer a lack of medicines, food and daily basic objects like paper rolls or tooth paste.

Because of this situation and the highest inflation on earth, the population has started to use cryptocurrencies. At the beginning Bitcoin was mined and used by different individuals and enterprises. Later, Ethereum became famous. The Police had strict orders to not allow cryptocurrency mining in the territory. Several small mining farms have been shut down by the security forces.

At the moment, the country is a deep recession from which no virtual currency is able to save it. The Petro is just another political and economical invention from the government in order to keep in power as much time as possible.

Image Courtesy of Pixabay and Twitter


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