Venezuela's economy collapses on petroleum. The Bolivar has lost 99.99 percent of its value against the dollar, and the country now endures one of the world's worst monetary crises. President Nicolás
Venezuela's economy collapses on petroleum. The Bolivar has lost 99.99 percent of its value against the dollar, and the country now endures one of the world's worst monetary crises. President Nicolás Maduro's administration launched the Petro in February 2018 to combat runaway inflation. The government announced the cryptocurrency in December 2017, billing it as backed by Venezuela's oil and mineral reserves.
Maduro hoped the Petro would revive the economy. Instead, the government faced organized opposition. Venezuela's National Assembly, a key opposition body, called the Petro unconstitutional and warned foreign investors and market participants against participating. Rafael Guzmán, head of the Committee of Permanent Finances, attacked the cryptocurrency. In his statement, he rejected government claims that workers would adopt the currency by choice. He accused officials of using the Petro to mask poverty and unemployment. "It is not with [The Petro]... With this, the crisis we are living only becomes more profound. The [Petro] is another example of corruption," Guzmán said.
The government pushed back with incentives. It promoted the Petro through its official website and created four exclusive economic zones to boost adoption. Officials announced plans to build 3 million housing units financed by Petro sales. Poor regions welcomed the promise, given the nation's acute housing shortages. Maduro held his strongest backing in these areas.
But Venezuelans remained skeptical. Maduro claimed the currency raised $735 million on the first day but offered no proof. He later said the Petro had raised $5 billion. The numbers don't match the whitepaper: 38,400,000 tokens at $60 each would yield a maximum of $2.5 billion. These inconsistencies and Maduro's unpopularity undermined the Petro's reception in Venezuela.
Internationally, the Petro faced harsher rejection. The Trump administration banned Americans from trading the Petro, though it remained unclear how the ban would be enforced. The measure reflected a broader campaign to force regime change. Major financial players rejected the Petro. Cryptocurrency exchange Bitfinex announced it would not support the currency, a sign others would follow.
The Petro and the Maduro regime share a single trajectory: collapse.
