Petro Cryptocurrency Declared Illegal
Members of Venezuela’s opposition parties claim that the use of the country’s Petro (PTR) cryptocurrency is illegal, according to domestic law. Asamblea Nacional, a political group that strongly opposes President Maduro’s government policies, has stated that the issuance of the Petro violates the constitution. The group also called Maduro’s crypto project a fraud, and a way to fool investors.
Furthermore, Asamblea Nacioanal vehemently opposed the sale of the Petro cryptocurrency, which Maduro says has already brought in $735 million. According to the group, the oil-backed digital currency will not be effective in helping the sanction-hit nation to recover from its ongoing political and economic crisis. Moreover, the legislature states that the ruling government party wants local businesses and retirement account holders to start accepting the Petro. Should this happen, it would be the first time that a Nation state has authorized and issued a blockchain-enabled payment method.
Venezuela’s Oil-Backed Cryptocurrency Called A Scam
Although Venezuela’s opposition party members acknowledge that blockchain and cryptocurrencies are a revolutionary new technology, they think that the oil-backed Petro is nothing more than a scam. Notably, the lawmakers believe that it is just another way for Maduro’s corrupt government to embezzle more money from people. If these allegations are in fact true, then it would be another devastating blow to the country’s citizens who have had to endure crippling hyperinflation and very high levels of unemployment.
During these times of crises, Venezuela’s ruling party has also put together competing legislature, which is referred to as the National Constituent Assembly (ANC). Reportedly, the ANC has promoted the use of the Petro as a way to bypass US-led sanctions, and called it an “act of rebellion.” Rafael Guzman, who’s in charge of monetary and finance policies, stated:
“This [Petro] deepens the crisis that we are living in. The PTR is another [example] of corruption, and we will come out of this crisis with measures that we have announced from this Parliament.”
Meanwhile, Deputy Francisco Sucre, another official who also opposes Venezuela’s newly launched cryptocurrency, asserts that there is no legitimate way to back and guarantee the PTR with the nation’s assets. Therefore, he demanded that its public offering be stopped, as it is basically a fraud. Additionally, while weighing in on Venezuela’s present economic and political condition, he noted:
“The situation in the country is becoming more jeopardized, nobody knows the origin of these investors, and nobody can invest a dollar in a guaranteed device with goods that come in free fall, like oil.”
United States And IMF Issue Warnings
Guzman and Sucre are not alone in voicing their concerns regarding the Petro and Venezuela’s instability. The United States Treasury has warned that the country could be violating internationally imposed sanctions by issuing its state-controlled digital currency. In addition, the International Monetary Fund (IMF) also projects even more turbulent times for Venezuela in 2018. That’s because it has determined that inflation in the country will skyrocket by 13,000 percent while its economy will shrink by as much as 15%.
Despite these criticisms and allegations, Venezuela’s PTR has captured the attention of investors in Qatar and Turkey. However, it is unlikely that simply issuing a state-backed cryptocurrency will help revive the Venezuelan economy. Clearly, much better reform measures are needed, along with more cooperation from the international community, in order for the nation to break free from its deep state of recession.