Petro, The Venezuelan Cryptocurrency Has No Users, No Investors and No Oil to Back It Up

Ever since the Venezuelan President Nicolas Maduro announced Petro, the country’s own cryptocurrency has been looked upon with uncertainty. On one side, some look at it as a great way of using the technology to create resource-backed assets and overcoming financial sanctions. While the other side sees it as nothing more than a scam by a corrupt government. To tip the scaled toward the latter bunch, a report from Reuters suggest that Petro has no users, no Investors and no oil to back it up.

After a four-month investigation in Venezuela about everything Petro, the Reuters news agency has issued a special report. The report questions the viability of the Petro. While the Maduro government fails to show any proof for it’s over the top claims for national oil-backed govcoin, the agency was unable to find any users, investors or readily recoverable resources that back up the currency.

The Petro

President Maduro proudly announced that petro has already brought in $3.3 billion and is actively being used to pay for imports. Contrary to his claims, Reuter quotes Hugbel Roa, who oversees the government’s Venezuelan Blockchain Observatory, that the coin is still under development :

“nobody has been able to make use of the petro … nor have any resources been received.”

He further adds that the NEM-based transactions were “early models,” buyers have only made “reservations” for petro, but it has not been released.

The Oil Back up?

Pegged to the price of one barrel of Venezuelan oil, Petro is supposed to be backed by Ayacucho I, oil reserves in a 380-square-kilometer bloc. According to the governments claim the area holds 5.3 billion barrels. While the veracity of the claims is under question, the remote area mentioned, in itself would require huge investments to build the infrastructure needed to access any oil it may hold. A reporter visited the town of Atapirire, located in the bloc and found that the  Venezuelan government is in no position to deliver on that in its current state.

The crumbling roads, abandoned old oil pumps, hungry kids, and residents complaining about power outages was all that the reporter discovers. According to Rafael Ramirez, a former oil minister that served for ten years under President Hugo Chavez and now lives in exile, an estimated cost of at least $20 billion would be required to access the promised reserves. He stated:

“The petro is being set at an arbitrary value, which only exists in the government’s imagination.”

So the Oil back up the government claims wants some major investment of its own, the Petro is still not fully ready and every claim of the government is like another spoon of lie added to an already brimming pot. So, the Petro is just a Scam????

Read more: Venezuela sets new bitcoin trading record by surpassing 500 million bolivars