Venezuela’s President Nicolas Maduro raises price of Petro by more than 100%

Venezuela’s President Nicolas Maduro raises price of Petro by more than 100%

The Venezuelan cryptocurrency the Petro has increased in value from 3.600 Bs.s to 9,000 Bs.s. The increase was ordered by the country’s president who has been working hard to see the cryptocurrency succeeds.

Maduro announced the increase in the price of the Petro against the country’s national currency the Bolivars on Thursday last week which took effect on Friday.

A renowned economist in the country Leonardo Buniak is not pleased with the sudden increase. He said the increase has devalued the sovereign Bolivar by more than 100%. Buniak also added that the Petro cannot be regarded as a real cryptocurrency if the president can order an increase in its price at any time.

When the president decrees that a petro is worth 9,000 Bs.s, what he is saying is that the petro is not a cryptocurrency but a debt title that is predetermined, [which] cannot be mined. It is impossible to think that it is a cryptocurrency when its value is not given by the interaction between supply and demand.”

Maduro had boasted earlier this year that the Petro price is pegged on mineral resources in the country and will be the first cryptocurrency to have real stores of value backing it. In August 2018, the president paired the national cryptocurrency with the main Venezuelan currency, the Sovereign Bolivar, an action which Buniak does not agree with. He said:

Anchoring the bolivar to the petro is anchoring it to nothing.”

Although there is no wallet for the cryptocurrency yet, report says the Venezuelan government still sells the digital currency and issues “certificate of purchase” to buyers. According to a local news outlet El Nacional, the president also announced at the end of November that the country will explore its tourism potentials and the Petro will be one of the currencies it at will be accepted as payment for the services.

It would seem like Maduro is trying as hard as he can to increase adoption for the Petro but his methods may be wrong. Currently, the wallet is not available for Windows and Linux operating systems and Google recently removed the Android App from its play store. Several other irregularities surround the digital currency such as disparity in the promised number of blocks and the existing number, as well as lack of public information on its network activities.

These issues coupled with the fact that the president directly regulates the price of the Petro may be serious hurdles to its recognition as a cryptocurrency much more to its adoption outside the country although the president wants to see it happen.

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