Venezuela buries its controversial Petro cryptocurrency

Five years after its launch, the state-run cryptocurrency Petro is being discontinued in Venezuela. What happened?

Venezuelan President Nicolas Maduro officially introduced the Petro (PTR) in February 2018 to replace the national currency Bolívar. support in the face of an economic crisis exacerbated by U.S. sanctions.

Now the controversial project is being canceled, according to several reports. These are based on a report about the Patria platform, which was the only website that allowed trading in the state cryptocurrency Petro.

The token was intended to be backed by the country's rich oil reserves and was controversial even before its launch. The country's opposition-controlled Congress declared that borrowing with the oil reserves was illegal. In 2019, U.S. authorities also sanctioned a Russian bank for petro-financing.

Among Bitcoin enthusiasts, the Petro was seen as an attempt to cheat an authoritarian regime whose dominance suffered from self-inflicted hyperinflation.

The end of Petro was preceded by a corruption scandal related to the use of crypto assets for oil deals, which led to the resignation of Oil Minister Tareck El Aissami and a crackdown on Bitcoin mining activities. This was reported by the French news portal AFP.

In 2020, Maduro tried to revive the petro by making its use mandatory for the payment of state services, such as the issuance of new passports. Ultimately, however, use remained very limited and the impoverished population remained skeptical of the petro.

Meanwhile, decentralized cryptocurrencies such as Bitcoin are a very popular protection against the rapid devaluation of the bolivar. According to a 2022 survey, 10.3 percent of Venezuelans own cryptocurrencies, compared to, for example, 8.3 percent of Americans and only 5 percent of Britons.