The move of Venezuelan President Nicolas Maduro to up the price of their national oil-backed crypto, the petro, has sparked intense debate. Tech-savvy Venezuelans and experts alike are not enthusiastic about the decision.
After the petro’s price increase last week, Venezuelans have blasted the President and his new digital currency. They said that a petroleum-backed crypto was a bad idea and the government was unaware of what it was doing.
The petro’s wallet is still unavailable, but the government continues to sell the cryptocurrency and give purchase certificates to buyers. However, Venezuelans working in the technology industry said they would never use it and experts are skeptical if the coin can even be trusted.
“I wouldn’t plan to use [the petro] and I don’t believe the exchange houses use them in Venezuela – they prefer to buy dollars to resell them and play with the exchange rate that is handled here according to the price of the peso compared to the bolivar and the dollar,” systems engineer and software developer Fabian Camacho stated, adding:
“I don’t have faith in any ideas of the government and that [petro] crypto coin is one more move to steal more money.”
Madrid-based tech business owner Gabriel De La Rosa said that no one in a position of power understands how it would function. “My sister worked directly with the country’s ombudsman,” he noted. “No one in the government had any idea about cryptocurrencies, or how to use them. No one knows how you can even link the price of petroleum with cryptocurrencies.”
“No one, absolutely no one, has any idea how it will function. And no one will accept a currency that they don’t have confidence in. So really, it doesn’t have any value,” he continued.
An unnamed Venezuelan working in Colombia claimed that the petro was a complete scam and that it was an avenue for the government to launder funds.
The Venezuelan government was accused of operating as a “mafia state” and of rampant corruption. Experts are criticizing the cryptocurrency for having no real use because of who is managing it.
Ecoanalitica director and economist said the oil-backed coin would “suffer the same fate as the bolivar,” the nation’s worthless currency.
“In the universe of crypto coins, the issue of trust is fundamental. In the case of the petro, the promoter is the Venezuelan government because it has the country in hyperinflation. I think it is a scam, it is a measure that doesn’t materialize, and many people don’t trust it. The government has been talking a lot about the petro as a cryptocurrency or as a unit of payment, but the truth is I don’t know that transactions are being made with it,” he said.
“If the petro is tied to the price of oil, then the president can’t announce the exchange rate on television,” Etoro senior market analyst Mati Greenspan said via Twitter.
The petro is intended to save crisis-stricken Venezuela, which is presently gripped by hyperinflation that causes chronic medicine and food shortage. The crypto should be supported by an area with five billion barrels of oil.
In October, the petro’s new white paper states that it is backed by 50% oil, 20% iron, 20% gold, and 10% diamond.