April 24, 2024

Venezuela Ends Petro Cryptocurrency Amid Scandal

Venezuela has announced quitting its petro cryptocurrency, initially introduced in 2018 by President Nicolas Maduro. The petro, designed as a countermeasure against U.S. punishment and backed by the nation’s oil reserves, was initially priced at $60 each. Despite high expectations, the petro struggled to gain grip, with its complexity leading to widespread confusion and criticism from various risk assessment agencies.

Attempts to boost Petro’s usage, such as mandating its use for airline fuel payments and state service fees, failed to increase its adoption significantly. Its application remained confined to certain government transactions, including tax payments. The petro’s operational platform, the Patria Platform, was the sole exchange medium, but users faced limitations, only being able to convert petros to bolivars through an auction system.

The final blow to the petro came amidst a corruption scandal involving mismanagement of oil-related crypto assets. This scandal precipitated the resignation of the influential petroleum minister Tareck El Aissami and led to numerous arrests, including senior officials of the Sunacrip crypto regulator. Following this, the government intensified its study of other cryptocurrencies like Bitcoin, which have been popular in Venezuela due to their stability compared to the volatile bolivar.

This development marks the end of the petro’s troubled 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.

Also read:Venezuelans Face Upto 20% Tax On Crypto Transactions 

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