Venezuela's petro cryptocurrency is 'officially dead'

All remaining petros are being converted to bolivars, the ailing local currency
An undated image of petro cryptocurrency. — CoinDesk
An undated image of petro cryptocurrency. — CoinDesk

Owing to the complexities involved in the trading of petro cryptocurrency, Venezuela decided to end petro, which was launched six years ago by President Nicolas Maduro to sidestep US sanctions.

It should, however, be noted that petro never took off because citizens struggled to understand how to use it and it was labeled a "scam" by some risk rating bodies eventually it became embroiled in a graft scandal.

The message, displayed on the platform’s site, read: “All crypto wallets held on the Patria Platform — the only website where the petro was tradeable — will be shut down on Monday, January 15.

While all remaining petros were being converted to bolivars, the ailing local currency.

The cryptocurrency was launched with great pomp and ceremony in February 2018, backed by Venezuela’s vast petrol reserves, and priced at $60 per unit.

With Caracas strangled by Washington’s economic sanctions, Maduro vowed the petro would "allow new forms of international financing."

However, citizens struggled to understand how to use it and it was labelled a "scam" by some risk-rating bodies.

In 2020, Maduro tried to revive the coin by ordering airlines flying from Caracas to use it to pay for fuel and making it mandatory to pay for state services such as getting a new passport.

Ultimately, however, its use remained limited to some state operations such as the payment of taxes. Traffic fines were handed out in petros, but it was not possible to pay them using cryptocurrency.

The government forced banks to present their balances in both bolivars and petros.

On the Patria Platform, mainly used by the government to dole out subsidies to the population, users could only exchange petros for bolivars via an auction system.

Taking to social media last week private platform CryptoLand Venezuela wrote: "The petro is officially dead.”

The death knell was a corruption scandal that erupted last year over irregularities in the management of funds from oil operations carried out with crypto assets.

The case led to the resignation of once-powerful petroleum minister Tareck El Aissami and the detention of dozens of officials including top management of the Sunacrip crypto regulator.

It also led to a crackdown on bitcoin mining operations in the country where other cryptocurrencies like bitcoin have been a hugely popular guard against hyperinflation and the deflation of the bolivar.

According to a survey presented in 2022 at the United Nations Conference on Trade and Development, 10.3% of Venezuelans own crypto, compared to 8.3% of Americans and 5% of Britons.