The national cryptocurrency of Venezuela which is the only country in the world that is backed up by a physical asset, in this case, was supposed to solve the situation in the country and bring prosperity to its population.
However, this happened to be different. Many experts from the very start have suspected, that the intentions of the Venezuelan government and the president were not as good as it was presented. Moreover, many believed, that the cryptocurrency will open new ways to corruption and money laundering, and their suspicions are shown to come true.
This week, the president Nicolas Maduro has announced, that bolivar will have five zeros less, and the new currency will be anchored to Petro, which is now worth 3,600 new bolivars. For 285 petro you can buy one US dollar.
Maduro insists, that Petro will be a strong competitor to dollar. He told that “they are dollarizing prices, and we will be petrolizing salaries and prices.”
However, this was just the speech of the president. The CEO of Venezuelan startup Cryptobuyer told that there is practically no such currency as Petro. Theoretically, it might be, but practically, they don’t have a single petro circulating, and moreover, functioning. There are no smart contracts, there are no rules, no token, it even isn’t in the blockchain. Hence, the cryptocurrency exists only in the mind of the president.
Specialists insist, that backing up the fiat money with crypto, which, in turn, is backed up by oil, an asset that has a huge external debt that cannot be paid even in the distant future, isn’t wise at all. Hence, these speeches are nothing more but a smokescreen to hide the failure to manage the country properly.