Venezuela’s President Nicolas Maduro has led the campaign for what will be the groundbreaking new digital currency Petro. The government backed, oil pegged currency was developed to aid Venezuela in their time of crisis due to their inflated currency. The once excitement that circled the new currency has settled down to whispers as many of the Venezuelan people fear Petro may be one big scam. Maduro continues to advertise Petro, inviting OPEC countries to join for the presale, however much of the world including the U.S. is not biting.
In order to understand the effects of Petro it is important to understand the political and socio-economic arena in Venezuela. In terms of politics, the people are mainly distributed among the two large factions, the Chavistas, the title given to fans of the socialist policies of the late President Hugo Chavez, and then you have the people who cannot wait to see the end to the 18 years of power of his United Socialist Party. Other than the economic collapse and hyperinflation of the nation’s currency, the country has been held in a political crisis for many years. The Petro is viewed as a tool to dampen the country’s failing currency, but it appears that the token will only be available to a tiny minority of the Venezuelan people.
According to Ricardo an individual exiled from Venezuela, he explains the cryptocurrencies place in the Venezuelan economy;
Nowadays, at least 80 percent of the population lives under the poverty line. Only a very small percentage of the population may possess the economic resources needed to use a crypto as a currency for everyday transactions; to have access to a smartphone, at least, and an even smaller percentage from the previous group possess the technical savviness to actually understand and use a cryptocurrency. Therefore, as a substitute for the failed Bolivar, this is far from being a solution for the people. Venezuelans may take sides when it comes to politics, and nowadays the great majority of the country rejects the Maduro regime. However, Venezuelans are spontaneous opportunists when it comes to prospects for personal benefit, especially economic. Add to that cultural trait the fact that the country is undergoing the worst economic, social, and political crisis of its entire modern history, and you got a catalyst for a very appealing use case of the Petro for regular Venezuelans.
Confidence in the Venezuelan digital currency appears to be grim, however it will be interesting to see how the people react to the sale of the coin and if any OPEC countries will help surge the demand. Many economists also believe the Petro token could be used to avoid sanctions which have followed the oil-rich country for so long. Maduro can keep cheering his coin on but without support from a large portion of the public or world, this once groundbreaking idea will spark little gains.