Venezuela has decided to terminate the petro cryptocurrency launched by its president Nicolás Maduro six years ago to avoid US sanctions.
According to the AFPThe petro, touted by Maduro as a solution to Venezuela's economic challenges, never took off and became embroiled in a corruption scandal.
Venezuelan President Nicolás Maduro delivers a speech during a press conference to launch international trading of the oil-backed cryptocurrency called "Petro" on October 1, 2018.
Petro Crypto in Venezuela goes offline
An announcement on the Plataforma Patria website informed users that all crypto wallets stored on the platform will be closed on Monday, January 15. The Patria Platform is the only website where you can trade with the petro.
The message on the site also said that the remaining petros would be converted to bolivars, Venezuela's currency. Launched with grandeur in February 2018, the petro was backed by Venezuela's extensive oil reserves and had an initial price of $60 per unit.
Nicolás Maduro envisioned it as a tool to enable new forms of international financing as the country grappled with economic sanctions imposed by the United States.
Despite these ambitions, the petro faced numerous challenges and citizens found it difficult to understand how to use it. Some risk rating agencies even called it a "scam", according to AFP.
Attempts were made to revive the cryptocurrency in 2020, including mandates for airlines to use petros for fuel payments. The country even required citizens to pay for certain state services using the crypto token. However, the petro's practical applications remained limited, mainly confined to specific state operations, such as the payment of taxes.
Although traffic fines were denominated in petros, there was no mechanism for citizens to settle these fines using the cryptocurrency. The government even forced banks to report their balances in both bolivars and petros.
The Patria Platform, used primarily by the government for the disbursement of subsidies, featured an auction system for users to exchange petros for bolivars. However, its complexity and restricted functionality contributed to its lack of popularity.
The disappearance of Petro Crypto
The petro's demise was accelerated by a corruption scandal that unfolded the previous year, exposing irregularities in the management of funds linked to oil operations involving crypto assets.
The scandal led to the resignation of Tareck El Aissami, former oil minister, and the arrest of numerous officials, including senior members of cryptocurrency regulator Sunacrip.
This crackdown on corruption extended to bitcoin mining operations in Venezuela, where cryptocurrencies like bitcoin served as a popular hedge against hyperinflation and the devaluation of the bolivar.
Despite the failure of the petro, cryptocurrencies remain relevant in Venezuela, as evidenced by a survey presented at the United Nations Conference on Trade and Development in 2022, which indicates that 10.3 percent of Venezuelans own cryptocurrencies, a higher percentage than in the United States and the United Kingdom. .
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