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Venezuelan President Promises to Give ‘Petro’ to...

Venezuelan President Promises to Give ‘Petro’ to its Senior Citizens

The Venezuelan President and the leader of the United Socialist Party Nicolás Maduro has revealed that the government plans to give Venezuelan retirees and pensioners the gift of petro this Christmas. The petro (PTR) is the first cryptocurrency launched by a nation state and the digital asset has been controversial since it was announced. 

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Regional news outlets from Venezuela have revealed that President Nicolás Maduro plans to dole out petro as a ‘Christmas bonus’ for Venezuelan retirees and pensioners. Moreover, despite the fact that many Venezuelans say average citizens don’t use the petro, Maduro also claims there are 27,000 petro affiliated businesses.

During Maduro’s recent speech, the president told attendees that cryptocurrencies and the petro will help Venezuelans battle against the “economic war.” “We have achieved the slowdown of the economic war through the self-regulation of the economy,” Maduro explained to the program guests. “With this self-regulation of the economy, other actors have begun to operate with their own currencies.”

In addition to the news that Maduro is paying retirees and pensioners with petro, he claimed during a government-sponsored program that the crypto has “27,000 affiliated businesses.” Maduro also explained at the program his bonus plan for pensioners and that he expected merchant adoption to “double in the coming months.”

Despite Maduro telling the crowd there are 27,000 affiliated petro businesses, reports last year stemming from Reuters tell a different story. The news outlet scoured multiple regions and chatted with a “dozen experts on cryptocurrencies” and no one found any signs of petro use. “The hunt turned up little evidence of a thriving petro trade,” the special report noted. “The coin is not sold on any major cryptocurrency exchange — No shops are known to accept it.”

What is Petro?

The petro, or petromoneda, launched in February 2018, is a cryptocurrency issued by the government of Venezuela. As of August 2018 it does not appear to function as a currency.

Announced in December 2017, it is supposed to be backed by the country’s oil and mineral reserves, and is intended to supplement Venezuela’s plummeting bolívar fuerte currency, as a means of circumventing U.S. sanctions and accessing international financing. On 20 August 2018 the bolívar soberano (Sovereign Bolivar) was introduced, with the government stating it would be linked to the petro coin value.

On 5 January 2018, Maduro announced that Venezuela would issue 100 million tokens of the petro, which would put the value of the entire issuance at just over $6 billion. It also established a cryptocurrency government advisory group called VIBE to act as “an institutional, political and legal base” from which to launch the petro. Carlos Vargas is the “Superintendent of Cryptocurrencies”.

Also in January, as a response to the petro, Venezuela’s National Assembly, headed by the opposition Democratic Unity Roundtable, declared the petro to be an illegal debt issuance by a government desperate for cash, and has said it will not recognize it.

Launch of Venezuelan Petro

The petro’s pre-sale started on 20 February 2018 at -04:00 UTC and ended on 19 March 2018 at -04:00 UTC. 38.4 million tokens were made available. The government stated the pre-sale raised US$3.3 billion, though according to Steve Hanke no independent audits were made to verify this claim.

The technological identity of petro was perplexing during its genesis. Initially, the white paper of petro stated that the currency would be on the Ethereum platform, but the white paper was changed at launch and the platform was to be NEM. However, even after the launch, white papers in various languages still shared conflicting information as to which platform the petro was part of.In October 2018, the white paper was changed once again, and a core developer of Ethereum, Joey Zhou, stated that the new petro white paper blatantly plagiarized from the GitHub repository of Dash. The newest version of the white paper revealed that petro was a clone, effectively a fork, of the cryptocurrency Dash, theoretically debunking the idea that petro was built on a separate blockchain platform.

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