Venezuela has Announced abandon its petro cryptocurrency, initially introduced in 2018 by President Nicolás Maduro. The petro, designed as a countermeasure against US punishment and backed by the country's oil reserves, had an initial price of $60 each.
Despite high expectations, the petro struggled to gain traction, and its complexity led to confusion and widespread criticism from several risk assessment agencies.
Some attempts to boost the use of Petro, such as requiring its use for airline fuel payments and state utility fees, have failed to significantly increase its adoption. Its application was limited to certain government transactions, including the payment of taxes.
The petro's operating platform, the Plataforma Patria, was the only means of exchange, but users faced limitations as they could only convert petros into bolivars through an auction system.
The final blow to the petro came amid a corruption scandal related to the mismanagement of oil-related crypto assets. This scandal precipitated the resignation of influential Oil Minister Tareck El Aissami and led to numerous arrests, including senior officials at cryptocurrency regulator Sunacrip.
The government then intensified its study of other CRYPTOCURRENCIES such as Bitcoin, which have been popular in Venezuela due to their stability compared to the volatile bolivar.
This event marks the end of the Petro's turbulent journey, as reported by Venezuela and other observers. It highlights the challenges of introducing state-backed digital currencies, especially in economies facing significant inflation and political instability.
