Venezuela’s President has high hopes for Bitcoin sale
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Venezuela’s President has high hopes for Bitcoin sale

Amidst serious financial crisis, the government of Venezuela is hopeful to inject $1 billion in its economy through the sale of petro, said President Nicolas Maduro. Petro is Venezuela’s native digital currency pegged to their vast fuel reserves launched to boost its dying economy.

Maduro said that he wants to stimulate its foreign currency reserves, the international reserves of the country and to minimize the rise of the black market dollar. Even after having the largest proven crude oil deposits in the world the country is stuck between a havoc of paying $8 billion this year while its foreign reserves have decreased to $9.7 billion.

Petro was launched in February this year, and its sales have brought $3.3 billion into the state coffers, said Maduro.  He added that $1.7 billion of the earning would be sued to import “food, medicine, and industrial goods.”

$1 billion would be given to Venezuela’s Central Bank on Friday “for currency auctions and to continue fighting the devil,” he said referring to the so-called “black dollar” form the reaming $1.6 billion dollars.

Currently, the country is struggling from chronic liquidity shortages and pressure from US sanctions. Petro was launched as the maiden government backed cryptocurrency to uplift the country out of the financial crisis.

Venezuela is primarily dependent upon oil reserves as 96 percent of the countries income comes from crude oil sales. Due to the falling oil prices the country has not been able to get up from the burden while economic sanctions from the US have also taken a heavy toll on the country.

The government of Venezuela has blamed Colombia and United States for starting an economic war on the country in order to overthrow Maduro. On the other hand, it has also accused mafias of the prevailing cash crisis in the country.

According to IMF, hyperinflation will likely push prices 13,000 percent in 2018 making Venezuela’s economic collapse the most severe financial crackdown in modern history.

There have been lot of speculations about Petro and its utility in real world. Yaya Fanusie, a former CIA counterterrorism analyst, said, “Venezuela is a really good test case. With Venezuela, on the face of it this is going to be a non-valuable token. Ok, well what would allow it to work? What would allow it to gain value?’”

He added, “It would probably only work if there were another state actor or state actors that decided to collude and buy in. These actors would have to create an ecosystem where there’s a belief in [the cryptocurrency], probably because they’re able to get other state actors with a lot of money to buy in to that system.”

Meanwhile, rating websites have already acknowledged Petro as a scam. ICOindex.com wrote, “We can discourage people from wasting money on this project.” ICObench, another rating website rated Petro 1.6 out of 5.

The reviews by popular websites can play a major role in determining Petro’s future. If investors do not show up to fund this currency, then Venezuela will probably lose its last hope to rise again.

Article written by Mark Rizzn Hopkins

Mark is a hardcore cryptocurrency fan. He has been following all of this very closely since 2011, and enjoy learning more technical details around blockchain as well as theorizing and architecting new solutions utilizing blockchain. To know more about Mark, follow him on Twitter.