Reading Time: 4 minutes

THE “ANCHOR” OF THE VENEZUELAN ECONOMY: WHAT IS KNOWN ABOUT THE PETRO

Important Note:

The following article was written by Javier Bastardo and first published on July 26th, 2018 on www.criptonoticias.com. Javier Bastardo is an active member of the crypto community in Venezuela, and he has been documenting the ongoing struggle of the Venezuelan people during these hard economic times. For updates and more of his work, please follow him on Twitter @criptobastardo.

Please note the following is a translation, and as such, may contain some errors. If you would like to read the article in the original Spanish, you may do so here:

https://www.criptonoticias.com/adopcion/ancla-economia-venezolana-sabe-petro/

 

Venezuela and the Petro

El “ancla” de la economía venezolana: lo que se sabe sobre el Petro

Venezuelan President Nicolás Maduro announced on July 25th that the new coinage of the country will be “anchored” to the value of the Petro, a cryptocurrency created by the government of the South American nation last year.

There are still no details about this decision, although it was established on August 20th as the deadline for economic change, after several delays. Despite the fact that the central government had already “used” Petros to finance public policies, the definitive step of “anchoring” the value of the all coinage to the Petro only occurred this Wednesday.

Venezuela’s President Nicolas Maduro, Venezuela April 5, 2018. ©THIRD PARTY / Reuters

“I am announcing that the monetary reconversion will start on August 20th with the circulation of the sovereign bolivar that will have a new form of anchoring to the Petro. A new monetary system of the sovereign bolivar anchored to the cryptocurrency the Petro (…) The reconversion will have two components: a central component, the change of coinage, and the reduction of 5 zeros to the Venezuelan currency through the sovereign bolivar and will have a basis for exchange and inter-exchange based on the Petro currency. The value of the Petro will be determined according to the value of the Venezuelan oil basket sold in the international market.”

Nicolás Maduro

President, Venezuela

WHAT IS KNOWN

The project was conceived as a  “solution” to the economic problems afflicting Venezuela . However, its development has been slow, between the rejection of an important sector of the country and the difficulties it has encountered in stabilizing and entering the ecosystem of cryptocurrencies.

Recall that, according to Maduro himself, the Petro will have a maximum issue of 100 million tokens, backed by more than 5,300 million barrels of oil, located in the Ayacucho Block of the Orinoco Oil Belt. In addition, after the private pre-sale, the president reported that some 3,380 million dollars had been invested.  The Venezuelan government also announced the Petro Oro , but it is still unclear whether these small pieces of precious metal have any relationship to crypto.

The PTR (Petro) smartcontract is not publicly known . Neither NEM nor Ethereum has confirmed the existence of this official contract and before the silence of the authorities, a series of scams associated with the token have proliferated. According to Etherscan data, in Ethereum there are more than 30 tokens with the PTR or PETRO tickers, which could generate confusion in unsuspecting users.

For its part, the government of the United States issued a harsh sanction on this cryptocurrency, prohibiting American citizens from investing and urging other countries of the world not to work with this cryptocurrency. The Office of Foreign Assets Control (OFAC) informed the general public that the Petro appears to be an extension of the Venezuelan government’s credit, so that the people who invest in it would not comply with Executive Order 13.808 and “could be exposed to risk of US sanctions. ”

Countries like India have been contacted to receive payments with PTR, although this did not come to pass. Only a Russian bank called Evrofinance Mosnarbank , apparently partly owned by the Venezuelan government, may have decided to use it, although no details of this possible negotiation are known.

In spite of everything, 16 operators of cryptocurrencies exchanges work with this token : Crypto Exchange, Cripto Capital, Financial Advisory CA, Italcambio, Criptomundo Casa de Intercambio CA, Antwerp Coin, Cave Blockchain, Valorata Casa de Bolsa, Coinsecure.ve, Critio Exchange, CriptoLago, Criptoven Trade CA, Menex CA Criptoactives, Bancar CA Criptoactives, 1444 CA Financial Investments and Criptoex Criptoactivo.

Exchanges such as Bitfinex or Crypto Zeus have separated themselves from this project, stating that they will not work with this token either now or in the future. In addition, some specialized rankings in the evaluation of cryptocurrencies and Initial Currency Offers (ICO) have discouraged this investment, which has even been described as a scam.

Due to this, the economist Luis Vicente León, through his account on Twitter,  assured  that “The Petro is a currency without relevant circulation, without confidence in the market and prohibited in large economies . Tying the new bolivar to Petro is tying it to nothing. ”

On the other hand, recently there was a wave of rumors about the possibility that in a robbery at the Simón Rodríguez Experimental University (UNESR) the thieves would only take “backup hard drives” from the transactions of this cryptocurrency; however, this information was not confirmed.

Users interested in acquiring the token should wait for its commercialization through exchange houses, since the last purchase process ended in March. The Venezuelan government created the website elpetro.gob.ve , so that users could access the PTR. However, at that time some irregularities were reported regarding data management, customer identification (KYC) and anti-money laundering (AML) policies.

The tokens have not been released and the Maduro government has not issued an official position on this issue . For its beginnings, according to local sources, the price of the PTR was pegged at 60.98 dollars per token, which, at the official exchange rate, equals more than 8 million bolivars. This implies that the majority of Venezuelans are surely unable to acquire Petros, or at least, a complete one, since the minimum wage, for July 2018, is located at 5,196,000 bolivars.

Featured Image by  AlekseyIvanov / stock.adobe.com

 

This translation made available by Crypto Breakfast

For parody videos and more unsolicited opinions, follow me here:

Twitter @CryptoBrekkie / Instagram @CryptoBreakfast  / “Blockchain and Morty” on Telegram