- Venezuela’s official cryptocurrency, the petro, is nontransferable
- The government says it will become a functional cryptocurrency by the 1st of October
- Investor interest in the Petro has being almost nonexistant.
Venezuela has had financial problems for a long time. At the height of this problem, its currency, Bolivar, was practically worthless. To combat the problem, President Nicolas Maduro, the country’s president, gave the order to issue petro, a cryptocurrency for the people of Venezuela.
Six months after Petro was created, little impact seems to have been made and to make matters worse, the currency seems to be practically unusable by Venezuelans. The government has stated that the currency is being improved upon and that issues will be resolved.
One of the major issues Venezuela faced was that the U.S had imposed tough sanctions on them and President Maduro had created the Petro as a means to go around them.
The problem now is that the Petro cannot be transferred and when individuals attempt to do so, they receive a notification that the currency is non-transferrable.
The problem is that cryptocurrencies, including Petro, are just that- currencies. If they cannot be transferred, they cannot be used to purchase good and services. Even worse, they cannot even be used to buy other cryptocurrencies such as Bitcoin.
Essentially, the Petro is unusable.
“It still doesn’t exist,” Moises Rendon, from the Washington-based Center for Strategic and International Studies, told AFP.
Maduro promising a fresh start for the Petro
However, according to the government, the Petro will begin functioning from the 1st of October 2018.
In a bid to get the Petro to gain some momentum, the government plans to auction Petros to private companies so that it will ‘be immersed in the global market’ according to President Maduro.
However, not everyone has faith in this plan. The Petro has been dormant and unusable for so long that it has developed the reputation of being a low-quality cryptocurrency that was created in an act of desperation to save an economy that is unstable.
In the world of cryptocurrency, confidence is what drives investment and it is something Petro is sorely lacking in.
“It’s too late to save the petro. There’s no confidence and it won’t get any” Says Moses Rendon.
The economic state of Venezuela has gotten steadily worse in the last few years. It is currently experiencing a 30-year low in oil production and despite issuing 100 million Petros this year little investment has taken place.