Venezuela’s Cryptocurrency Still in Limbo

Venezuela’s cryptocurrency, which proved to be controversial, was launched six months ago but has been left in limbo ever since. Despite its apparent status, the country’s President Nicolas Maduro and his government insist that the digital currency will soon start working, a new report finds.

The only catch, however, that this was not the situation a man – known only by the name of Armando – experienced after trying to make a transaction using the Petro. “Non-transferable” was the message that came up on his telephone when he used the half Petro he purchased earlier this year.

Maduro launched the cryptocurrency in hopes of circumventing the debilitating United States sanctions. The problem here is that the token cannot be exchanged for real money.

‘Doesn’t Exist’

Contrary to popular belief, the Venezuelan cryptocurrency is not listed on virtual exchanges, although the government has already set is valued at about $60, a figure that anchored it to the price a barrel of oil.

“It still doesn’t exist,” Moises Rendon from the Washington-based Center for Strategic and International Studies said.

But for Maduro, “the Petro will start functioning as a currency of exchange of purchase and conversion” come October 1.

It will be offered in auctions through which private companies will gain access to currencies, within the framework of an exchange control that has been operating since 2003.

This way, Maduro believes, “it will be immersed in the global market.”

‘No Confidence’

As far as Rendon is concerned, it is already too late “to save the petro.” There is no confidence, according to him, and it is impossible to get any when the government prevents its value from fluctuating freely.

Venezuela is in desperate need of liquidity because it continues to struggle in the oil industry. As of press time, the country is reportedly producing a 30-year low of 1.4 million barrels a day, compared to the record high of 3.2 million 10 years ago. This is not to mention the fact that it has an external debt of $150 billion.

Washington’s economic sanctions, on the other hand, are not helping. They continue to strangle the country, preventing its government from getting its hands on the foreign capital it desperately needs.

Maduro revealed that Venezuela had received “offers of purchase intention” worth $5 billion but the petro blockchain on the NEM platform registered transactions amounting to just over 2,250 units, the equivalent of around $136,000 between March 25 and May 6.