Venezuela has big plans for the Petro cryptocurrency. Backed by natural oil reserves, this new form of money can solve a lot of ongoing issues. Given the financial turmoil in this country, some good news is more than welcome. It now turns out there are aspects about the Petro which will not be all that appealing. By keeping the sale of this cryptocurrency mostly private, there are growing concerns over the potential buyers.
The launch of the Petro cryptocurrency is almost upon us. This concept brought up by President Maduro, may effectively solve some of Venezuela‘s financial issues. With mounting debt and a local currency which is virtually worthless, something needs to change. Issuing a national cryptocurrency may be the only course of action left on the table. So far, the government has been divided on this front. Some people support the idea, whereas others openly oppose it.
What Comes Next for the Petro?
It now turns out the sale of this cryptocurrency will not be public. In a way, this is not all that surprising, yet it is still rather unfortunate. With over 40% of the initial coin offering reserved for institutional investors, the Petro suddenly looks less appealing. The remaining 60 percent could serve as a discount to initial buyers. Or that was the initial plan, but this seems to have been revised rather recently. With 60% of the supply yet to be allocated, investors grow wary.
It is evident this cryptocurrency would solve a lot of problems. Venezuela is subject to major sanctions. Using the Petro would – illegally – bypass these sanctions. It may be a short-term solution, but from a long-term perspective, it is a can of worms. It is possible the Petro will have a big impact in the future, though. However, only time will tell if that can effectively be the case. It all depends on how the initial coin offering pans out. Right now, that future seems rather uncertain.
The guaranteed acceptance of this cryptocurrency is another topic of debate. With a fixed supply of Petros in circulation, it would make sense for service providers to accept the payment method. However, there is no indication this will happen by default. Using it to pay for fees and taxes is a good first step, but the government has never confirmed as much. Overseas adoption of this currency is also in question as of right now. Rest assured this is not the last we hear about Venezuela’s Petro currency.
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