Venezuela Halts Operations of the Digital Currency Petro

Venezuela's national digital currency, Petro, is set to cease operations after nearly 6 years of issuance but minimal widespread usage.

Venezuela Halts Operations Of The Digital Currency Petro_65bad0944d383.webp

Venezuela halts operations of the digital currency Petro

According to Max Keiser, a veteran Bitcoin investor, the national digital currency of Venezuela, Petro (PTR), will officially cease operations starting January 15, 2024, after almost 6 years since its launch. All PTR will be converted to bolívar, Venezuela’s national currency.

Petro was introduced by Venezuelan President Nicolas Maduro in 2018 to support the national currency bolívar amid rampant hyperinflation, reaching thousands of percentage points, due to economic sanctions imposed by the United States, which effectively isolated the country from the global investment market.

As predicted in 2019, Venezuela’s ‘Petro’ coin was never gonna work for the exact reasons I said it would fail. https://t.co/dKNSeiw2Fs pic.twitter.com/UyxcNQjxGP

— Max Keiser (@maxkeiser) January 14, 2024

The national digital currency Petro is pegged to the abundant oil reserves of Venezuela. The price of 1 PTR is supposed to be equivalent to the price of 1 barrel of Venezuelan oil – approximately 60 USD per barrel. It was envisioned as a multifaceted national asset, including:

  • A transferable asset for trading goods and services, even as cash.

  • A digital platform for transferring and trading electronic assets backed by various resources such as oil in Venezuela.

  • A legal means of payment throughout the territory of Venezuela: Allowing citizens to use PTR for taxes, debts, fees, and being accepted by individuals as well as businesses.

However, it has not been widely adopted by citizens and lawmakers due to being labeled as illegal for misusing the country’s oil reserves, along with disapproval from national banks like Banco de Venezuela. In 2021, the Central Bank of Venezuela also announced plans to issue a CBDC, but as of now, this plan has not materialized.

venezuela halts operations of the digital currency petro 65bad094514b5

Related: The Transformative Influence of CBDCs on Central Banks’ Risk Landscapes

Despite criticism from both within and outside Venezuela, the Maduro government continues to promote Petro to the 10 member countries of the Bolivar Alliance, even declaring intentions to replace the US Dollar (USD) in crude oil trading and airline ticket purchases.

In reality, after almost 6 years of existence, Venezuelans do not fully understand how Petro operates, and limitations in its use for certain state activities, such as tax payments or traffic fines, contribute to the dwindling relevance of this national digital currency.

(100 votes)

5.0/5

(100 votes)

Latest

Trump Memecoin Faces 50% Token Unlock, Investors Fear Major Sell Off

News | Editor Choice | Memecoin

Trump Memecoin Faces 50% Token Unlock, Investors Fear Major Sell-Off

TRUMP memecoin is about to undergo its largest-ever token unlock, with 50% of its supply set to be released — raising fears of a potential sell-off as the market remains in a fragile state.

Coinbase Rejects Claims Attacking Binance

Policy & Regulations | Editor Choice

Coinbase Rejects Claims Attacking Binance

Coinbase's legal director has clarified that they are not involved in the recent attacks on the Binance exchange.

Xrp Surges Past $3 As South Korean Retail Demand Drives Rally

News | Altcoin | Editor Choice

XRP Surges Past $3 as South Korean Retail Demand Drives Rally

XRP has recently surged past the $3 mark, driven by strong buying pressure from South Korean investors, with the Upbit exchange playing a central role in this sharp price increase.

Germany And The Us Missed Billions By Selling Btc Too Early

News

Germany and the U.S. Missed Billions by Selling BTC Too Early

Bitcoin's price has continuously set new all-time highs and is currently trading around $120,000. This significant increase has caused many countries to lose billions of dollars, particularly Germany and the United States.

Mexc Faces Criticism Over Account Freezes And Withdrawal Delays

News | Editor Choice | Policy & Regulations

MEXC Faces Criticism Over Account Freezes and Withdrawal Delays

Global cryptocurrency exchange MEXC is facing mounting backlash as more users report arbitrary account freezes and prolonged withdrawal delays.