In a televised address late yesterday evening, Maduro announced that his regime’s in-house cryptocurrency, the Petro, is now legal tender in Venezuela.

Maduro touted the fact that the Petro was “developed by Venezuelan scientists”, and called on all Venezuelans to register for their digital Petro wallet on the digital coin’s website.

During his speech, Maduro also encouraged Venezuelans to being paying for goods and services in Petros as soon as possible. He said:

Starting today, the use of the Petro as a Venezuelan currency is legal. Starting today, we must allow and promote the sale of real estate in Petro, [as well as] the payment for hotels [and] international flight tickets. 

It is not immediately clear if Maduro meant by his comments that the services he listed must be paid in Petros for now on, or why he picked out those services in his speech.

The Petro will be available to purchase online for Bolivares Soberanos, the country’s paper currency, starting on November 5

Maduro’s speech took a surreal turn when he attempted to provide a practical example of how Venezuelans can use the Petro:

If, in December, you want to go to Paris or New York, to spend your vacation anywhere in the world, you can buy Petros, and using the Petro, buy your flight. 

Venezuela is currently living through the worst socio-economic collapse in its modern history. 61% of Venezuelan live in extreme poverty, and an inflation rate expected to hit one million percent at the end of the year makes acquiring scarce food and basic necessities a monumental task. 

Petro’s Live Launch Plagued By Questions, Concerns

Originally announced in January of this year, the Petro has been universally panned by economists and cryptocurrency experts alike as nothing more than a thinly-veiled attempted to circumvent U.S. sanctions on regime officials and Venezuelan government bonds. 

Matt O’Brien, The Washington Post‘s economic reporter, summarized the Petro in the following way:

It isn’t an exaggeration to say that the petro might be the most obviously horrible investment ever. There isn’t even a story you can tell yourself about why it might work.

Noticiero Digital pointed out in an article published today that even the most basic facts about the Petro are still a mystery, given the regime’s inability or unwillingness to provide information about the coin.

According to the website, the regime has failed to clarify the following:

  • How many Petros can be issued? This is important to know because digital cryptocurrencies operate on the basis that there is a limited amount of them. However, the regime has issued contradictory statements on this, saying both that there will only ever be 100 million Petros, and also that there will be “as many as there is room for in relation to [oil] reserves”
  • How much is each Petro worth? Initially, the regime claimed that each Petro would be worth one barrel of Venezuelan oil. However, the algorithm that calculates its value suddenly changed, and the price now takes into account he price of Venezuelan gold, iron and diamonds. 
  • What blockchain does the Petro use?  While the regime initially announced that the Petro would run on the NEM blockchain, Maduro announced that it would in fact used a “sovereign, national” blockchain, suggesting a, unknown, custom-built one. 
    Blockchains are the backbone of any digital cryptocurrency, because they are used to track and verify ownership and transactions. 
  • How many petros have been sold? Maduro has made statements on the volume of pre-launch Petro trade that contradict information available through the NEM blockchain, casting doubt on the true number of transactions involving the Petro. 

Bogota: Four Million Venezuelans Could Live Here By 2021

Colombian Minister of Foreign Affairs Carlos Holmes Trujillo said today that Bogota believes that there could be as many as four million Venezuelans living in Colombia by 2021 if the crisis in Venezuela continues to worsen. 

Trujillo said:

The worst-case scenario–in other words, in a scenario were the crisis could get worse–we could be talking about four million Venezuelans in Colombia. 

It is not immediately clear what Trujillo considers a worsening of the Venezuelan crisis, or what the current migration trends suggest the Venezuelan population in the country might be in 2021.

Trujillo also said that the Venezuelan migrant phenomenon is unprecedented in both Colombia and the region. He pointed out that Colombia is currently sitting in third place in terms of migrant population, behind Turkey and Lebanon, which he claims host 3.1 million and 936,000 Syrian migrants, respectively. 

Questions/Comments? E-mail me: invenezuelablog@gmail.com

One thought on “10.02.18: Paris on Petro

  1. Pingback: 10.05.18: Forced Petrofication | In Venezuela

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