Narayan AmmachchiFive years after launching with much fanfare, Petro, the cryptocurrency backed by Venezuela’s oil reserves, appears to have reached its final chapter.
Local media reports indicate the Venezuelan government is converting all remaining crypto assets into the national currency, the bolivar.
President Nicolás Maduro introduced Petro in 2018 as a way to get around US sanctions and revive Venezuela’s ailing economy.
Priced at US$60 per unit (about the same price as a barrel of WTI crude), it was supposedly backed by the country’s vast oil reserves and other assets, including gold.
Despite lofty promises, Petro faced challenges from the outset. Ordinary Venezuelans lacked the means and knowledge to access the crypto coin.
In attempts to revive Petro, the Maduro government mandated airlines to use it for fuel purchases and made its use obligatory for some State services.
The final blow came amidst a corruption scandal surrounding oil sales, leading to the resignation of former Petroleum Minister Tareck El Aissami, under whose leadership Petro was launched.
Dozens of officials, including top management of Sunacrip (Venezuela’s cryptocurrency regulator), currently face imprisonment for their alleged involvement in misappropriating oil-derived crypto funds.
Venezuelan newspaper Últimas Noticias reported that approximately US$3 billion in revenue from crude oil sales had gone missing.
Amidst the freefalling value of the bolivar, many Venezuelans turned to crypto for financial stability. A 2022 UNCTAD survey revealed that over 10% of the population owns some form of crypto, highlighting the enduring search for alternatives in a crisis-ridden economy.
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