El Petro, the oil backed Venezuelan cryptocurrency has been approved by Venezuelan National Constituent Assembly. It has also been called “one of the worst investments ever.” Mainstream media has not been kind to the coin, and on top of that President Donald Trump has banned US purchases of the Venezuelan cryptocurrency.
The United States have also imposed other sanctions on Venezuela and urged the country to address its human rights issues and return to the democratic process. Although Venezuela and Russia have agreed to do business using El Petro, the coin is not being received very enthusiastically by the rest of the world and removing American buyers will greatly reduce the number of speculative investments.
Still, Venezuela’s leaders are expecting the crypto movement to save the country’s struggling economy. In February, Venezuelan President Nicolas Maduro indicated that the country intends to launch cryptocurrencies backed by precious metals in the future.
Vice President Tareck El Aissami, declared that Venezuela was “making history with the approval of the Decree on Cryptoassets and the Cryptocurrency El Petro. Nothing can stop the impulse of our country.”
El Petro has been in its presale while the Venezuelan government has been hashing out the systems that will be put in place to regulate the coin. Previously, El Petro was declared unconstitutional, but now with parliamentary approval, the project will move forward. President Maduro ensures that “El Petro belongs to the Venezuelan people,” even though the decree gives him the power to completely control the cryptocurrency.
While having the most oil reserves in the world, Venezuela still suffers from hyperinflation and a tanked economy. The country is actually rich in resources and its leadership thinks the oil backed crypto will help them harness the wealth they are sitting on and create economic opportunity for its people.
It would be kind to say that Venezuela has been less than transparent in the past, and that collides with supposed goal of helping its citizens reach monetary freedom. Furthermore, according to a report from Ars Technica, there have been inconsistencies in the White Paper which originally claimed that El Petro would be an ERC20 token but now states that they will use the NEM blockchain.
And amazingly, the Venezuelan government has yet to provide any proof of the $735 million dollars that they have raised in the ICO.
Albeit exciting to see countries jumping into the cryptocurrency pool, many experts in the field are afraid that a poorly conceived token that is controlled by someone who has been labeled a dictator could affect the perception of cryptocurrency in a negative way on a global scale.
