Venezuela is launching its very own cryptocurrency in approximately one day. Petro is its name, battling hyper-inflation and economic sanctions is its game. The struggling country has announced that they will be launching Petro, which is backed by 5.3 billion barrels of liquid gold a.k.a. oil which is worth, by their estimation, in the neighborhood of $267 billion. That being said, the cryptocurrency being released by a country in order to circumvent economic sanctions and hyper-inflation is both interesting and paradoxical, being that cryptocurrencies are marketed mainly for their decentralization.
Venezuela is in turmoil . Since 2014 Venezuela has been embroiled in violent struggles and protests over President Nicolás Maduro’s handling of inflation, basic life necessities, law enforcement, economic growth, and crime. Venezuela’s government has responded to these protests with force, claiming that these protests are indicative of a “coup d’etat attempt”. These violent clashes have further destabilized the country and have led to speculation about whether the country will be able to recover. The inflation in the country has gotten so bad that there are people smuggling rolls of 100-bolivar notes out of the country into Colombia, in order to sell the notes as souvenirs to the people of Colombia because they are out of circulation in Venezuela as of 2016. The government has issued a 100,000-bolivar note in order to adjust to the massive economic downturn which has resulted in the devaluation of the currency.
Nicolás Maduro discussing inflation and the economic state of Venezuela during his talk show, "Los Domingos Con Maduro".
Now that we have gotten the back-story out of the way, we can talk about the possible skepticism surrounding Petro. Obviously, the most basic of crypto enthusiasts will tell you that this cryptocurrency is born from the desperation of a seemingly corrupt government, and those people would be mostly right. The Corruption Perception Index (CPI) is an index published yearly by Transparency International which ranks and rates 176 nations based on their outward corruptness, with 0 being very corrupt and 100 being squeaky clean; according to the CPI, Venezuela is ranked 168th with a corruptness score of 17… That’s right, seven-fucking-teen. Anyway, Venezuela has no interest in blockchain, crypto technology and/or anything related to the crypto space.
In my humble opinion, regardless of the “value” that backs this cryptocurrency, it is simply not one that you should venerate, especially since it backs an openly repressive government headed by a corrupt group of oligarchists. Although, we all have free will and you are free to do as you wish. Just as always make sure that you make your decisions in good conscious and try not to only focus on the valuation or profitability of the thing. Make sure that you make a decision based on something you believe in. That is not to say that it is not okay to chase profits sometimes because, hey, you gotta get your money, but make sure that it is not the only reason you took an interest in crypto. Make it meaningful to you and to the whole space. As always, good luck and stay well.
References
https://www.cnbc.com/2017/12/29/venezuela-oil-backed-cryptocurrency-to-launch-in-days.html
https://www.reuters.com/article/venezuela-economy-cryptocurrency/venezuela-oil-backed-cryptocurrency-to-launch-in-days-government-idUSL1N1OS1GY
https://www.ethnews.com/launch-of-venezuelan-petro-cryptocurrency-reportedly-imminent
https://www.seattletimes.com/nation-world/venezuelans-abroad-panhandle-with-their-useless-cash/
https://www.transparency.org/research/cpi/overview