The Story of Venezuela’s Petro Cryptocurrency

The former President of Venezuela, Hugo Chavez. His socialist ideology inspired a centralised, worker's state in Venezuela.

Venezuela is an exciting Latin American country, having been for decades one of the world’s largest oil producing economies. In recent decades it has become associated with the rise of a uniquely Latin American radical socialism, termed Chavismo after its founder Hugo Chavez. His successor, Nicolas Maduro, has been in the news lately due to an attempted coup against his government last year. Under his leadership, Maduro announced the creation of Venezuela’s own cryptocurrency, the Petro. The cryptocurrency would be bolstered by the country’s petrol trade and intended to supplement the country’s ailing fiat currency.

The Petro

Moreover, supporters of the Maduro government sang the tune of the government. They praised the creation of this cryptocurrency and the incorporation of blockchain into the declining economy.

On the other hand, opponents of socialism envisioned the decentralisation of money into blockchain would incite Venezuelans to a counter-revolution and a rapid decline in the centralised state’s powers. Coindesk further posits that if the centralised Chavist government falls, and the economy and banking systems as well, then blockchain technology and the country’s Petro cryptocurrency could be an answer to the country’s financial woes.

Venezuelan cryptocurrency today

The Petro saw a decline in use following its inception. In January 2020, Maduro announced he would commit to a resurgence of the Petro in popular financial discourse, reported France24. Maduro intends for the currency to become a normal mode of payment for Venezuelans. He has been trying to implement the Petro as the mandatory currency to pay for state services like passport issuance.

In December 2019, the state paid bonuses and pensions with the Petro. A couple of weeks later, the state blocked the exchange of Petros to Bolivars (the country’s fiat currency). In August 2020, Venezuela collected municipal taxes in over 300 municipalities using the Petro, reports Bitcoin.com.

As the Petro resurges as a viable and useful alternative to the struggling fiat currency, what will the future of the country’s economy be?

Neighbouring Latin American countries such as Mexico, Brazil, and Argentina have also seen sharp increases in cryptocurrency usage as of late. Cryptolydian reported on 31 August 2020 that Venezuela had blocked the use of the country’s popular digital currency exchange Airtm.

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Raïs Tarek 87 Articles
Journalist and lawyer, with a passion for global politics, economics and current affairs.