Controversial Venezuelan cryptocurrency, Petro, is in the news yet again! Venezuela’s local media outlet, TeleSUR TV, cited President Nicolas Maduro unveiling the latest details in a speech. He said that investors can trade the tokens against other digital assets only if purchased before the end of 2018.
The exact translation done by crypto analyst Jill Carlson reads, “Anyone who buys the Petro until Dec. 31st will be able to convert it into any other digital currency.”
Hyperinflation Pinching the Venezuelan Economy Very Hard
Over the last year, the Venezuelan economy is on a tailspin with its native currency bolivar devaluating drastically. Hyperinflation has gripped the country’s economy pretty hard as Venezuela faces huge sanction from the U.S. and other countries.
In order to prevent this downfall and circumvent the U.S. economic sanctions, Venezuelan President Nicolas Maduro considered adopting the cryptocurrency route. Earlier this year in February, the Maduro government announced the launch of Venezuela’s native cryptocurrency ‘Petro.’
According to the Petro whitepaper, the cryptocurrency is backed by Venezuela’s oil reserves and other natural resources. However, the Venezuelan government failed to provide substantial evidence against these claims. Moreover, the whitepaper also notes that Venezuelan citizens can use Petro for payment of national taxes and fees.
“The Bolivarian Republic of Venezuela guarantees that it will accept Petro’s as a form of payment of national taxes, fees, contributions and public services, taking as a reference the price of the barrel of the Venezuelan basket of the previous day with a percentage discount of Dv,” the original whitepaper of Petro read.
During its first token sale in February earlier this year, Maduro claimed to raise a whopping $1B USD. “We already have offers and negotiations that exceed US$1 billion, in just two days, far exceed US$1 billion, here in the hand, cold and hard,” said Maduro.
However, many analysts say that all these claims from Maduro are a farce and misleading. On the contrary, the Venezuelan government has neither provided any evidence so far against Maduro’s claims.
Petro Not a Real Cryptocurrency
The two major characteristics of a cryptocurrency are transparency of transactions and decentralization. However, the token seems to be violating them and doing the exact opposite.
The control of the Petro is totally in the hands of the Venezuelan Government. Moreover, it is being subjected to an absurd policy like the time-frame implementation for the buying and selling of Petro.
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