Venezuela has suffered from egregious economic issues for decades. Hospitals lack necessary supplies, people are struggling to find each meal, and the national currency—the bolivar—lost 96 percent of its value in 2017. In an effort to combat Venezuela’s dire situation, its government became the first country in the world to implement a national cryptocurrency (and declare it as its primary currency) earlier this year.
It was undoubtedly a bold move, intriguing blockchain advocates around the globe. So how is the cryptocurrency, known as the Petro, faring?
Truthfully, not well. The Petro is still young, and numerous doubts and concerns are circulating around its execution. While some members of the Venezuelan government are fierce proponents of the Petro, others (along with international parties) regard it with suspicion, which negatively influences the public’s willingness to take it seriously.
Off to a Rocky Start
The Petro’s initial announcement was broadcast during a television Christmas special in 2017. The President, Nicolás Maduro, noted his belief that the cryptocurrency would improve issues of financial sovereignty.
Daniel Pena, the executive secretary of Venezuela’s Blockchain Observatory, said that he expected the Petro to positively impact the nation’s economy within three to six months after inception:
“There are many advantages, among them is that the inflationary scheme of the Venezuelan economy breaks down… It is a digital currency that is safe to handle and has more functionality. The intermediaries will disappear; it will be a directional purchase. The waiting time for transactions will be reduced, because it will be faster than the banking system.”
What Pena describes, though, are the fundamental elements of general cryptocurrency. The Petro itself has failed to deliver.
The cryptocurrency’s launch was fraught with misinformation and controversy. In January, the National Assembly of Venezuela declared the cryptocurrency illegal, believing that it intends to circumnavigate financial sanctions and legitimize illicit transactions. Parliamentarians voted “absolute nullity” on issuing the Petro, stating that the Assembly would deliberately make efforts to prevent the public from accepting the cryptocurrency as legitimate.
