Since 2014, Venezuela, a tropical country in South America, has been suffering from severe hyperinflation — which has seen its national currency, the bolivar, become essentially worthless. In 2018, the situation has gotten so bad that some people have resorted to weighing the money to trade for goods rather than counting them, due to the sheer number of bills involved.

Major financial holding companies have been staying away from both the bolivar and the Venezuelan economy at large since around 2016. Financial experts such as Siobhan Morden, the head of Latin America’s Fixed Income Strategy at Nomura Holdings, has publicly denounced the currency in the past and has been quoted as saying the bolivar is “absolutely a worthless currency.”

To help stabilize the economy and stop the free fall of his existing national currency, Venezuelan President Nicolas Maduro led his government to release the Venezuelan Petro (PTR) — which was (supposedly) poised to fully replace the bolivar as a new national currency by purportedly being pegged to the country’s oil reserves.

“Anyone who buys the Petro until Dec 31 will be able to convert it into any other digital currency.”

Like, what?? https://t.co/KiO9xbFubt

— Jill Carlson (@jillruthcarlson) November 7, 2018

According to reports from TeleSUR TV during a meeting with the members of United Socialist Party of Venezuela (PSUV) in Caracas, the government announced that it has raised $5 billion dollars during the presale of the token — with over 186,000 verified purchases.

The recent move from the Venezuelan government to control and limit the free trading of Petro purchased after Dec 31, 2018, has raised concerns among cryptocurrency experts and created an overall negative outlook on the digital asset’s image.

Many traders and experts alike take the view that this announcement as contradictory to the core principles of a cryptocurrency, in which the decentralization of economic power and free movement of money are held paramount.

This news, combined with the administration’s severe lack of transparency and high degree of corruption, makes the future of Petro look bleak. In fact, it appears almost deliberately poised to follow in the footsteps of the Bolivar. 

Despite all the onslaught of negative statements made about Petro recently, will the crypto-community buy into the visions of President Nicolas Maduro? Can state-backed cryptocurrencies like Petro succeed? Let us know your thoughts in the comments below! 

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