As more countries seek to adopt their own cryptocurrencies, Venezuela’s Petro is struggling to meet expectations in the face of economic difficulty
Introduced in 2018 as a solution to rampant inflation and economic turmoil, Venezuela’s Petro currency has met more adversity than expected.
The Venezuelan Government has insisted that the token is trading at around $80 but has been found on the open market for as little as $8. The government has made numerous attempts to integrate the Petro into its economy, such as making it the only payment option for citizens to purchase passports and for paying public workers holiday bonuses. There is also an official wallet for the coin called PetroApp where users can store their coins.
However, the price disparity is likely to have angered Venezuelans who will be expected to buy these items at the price the government has insisted on.
China has recently unveiled testing for its own Digital Yuan and may have learned lessons from Venezuela’s mistakes by limiting the rollout until the concept can be proved to work first.
Mistakes such as forcing companies to accept the token as a form of payment when there is so much dispute over Petro’s actual value. Many have been forced to sell their Petro at a loss in order to convert them to Bolivars, the currency used in Venezuela.
In response, many companies have stopped accepting Petros, despite the government’s instruction for the currency to be used as a legitimate form of payment, leading to conflicts between the government and the Venezuelan population.
Venezuela has also tried to bring in the failed project as a means to pay doctors additional money for fighting the coronavirus, showing that the government has no plans to give up on the project just yet.
Cryptocurrencies are generally quite popular in the South American country, with many holdings of Bitcoin found there. This is probably due to the instability of the Bolivars and the Petro meaning that Bitcoin is a better store of value than two overly inflated currencies that are likely to further depreciate in the future, due to US sanctions taking their toll and the rock bottom oil prices that will have had a major impact on its role as an oil exporter.
In some more positive news, the market downturn seen in the crypto space in March was avoided by the Petro. Although this may be because the price was already overvalued and inflated by the government.