Analysts of the Brookings research Institute claim that the Venezuelan Petro cryptocurrency (PTR), backed by oil is likely to damage the cryptocurrency than help Venezuelans to avoid the crisis that is currently experiencing the country.
Following in the footsteps of Venezuela and other countries are also seeking to issue their own national cryptocurrency. For example, Iran wants to try his hand at running your own virtual token supported by the government. In Turkey also think about creating a national cryptocurrency Turkcoin backed securities.
Petro is tied to the oil reserves of Venezuela, and the exchange rate for Petro/Bolivar reportedly includes a discount set by the Venezuelan government. This, according to the research Institute, indicates that Petro is subject to the “arbitrary adjustment of the discount rate, fluctuations in oil prices and a corrupt government that manipulates its currency”.
“There is a real danger that Petro will not only eliminate the economic difficulties of Venezuela, but also weaken the integrity of the cryptocurrency,” the analysts add.
The researchers note that foreign investors financed exclusively pre-sell Petro that led to the capital inflows. It should not be, as Venezuela is under international sanctions.
According to researchers, Petro was, in fact, a ploy to ensure that the government has been able to attract capital, which will not bring any benefit to them. In addition, it is unclear how foreign investors will be able to use Petro, as the whitepaper says that the cryptocurrency can be used only for the payment of taxes, fees and utilities in Venezuela.
According to CCN, President Nicolas Maduro has ordered state institutions and airlines in the country to take Petro. Despite the alleged adoption of the cryptocurrency in Venezuela, foreign investors will not be able to exchange it even for a barrel of oil.
All this can serve as a bad example for other countries. While “national cryptocurrencies” give priority to decentralization, security and transparency, Petro “does not provide any real services to their foreign holders”. Everything else, the Venezuelan government announced the creation of a new, gold-backed, cryptocurrency Petro Gold.
According to analysts, when investors discover that Petro has no long-term value, the idea that cryptocurrency contribute to fraud will increase even more.” Moreover, international sanctions may be jeopardized if countries begin to act more aggressively and avoid them using the cryptocurrency.
“We need to take a tough stance in relation to the development of empty cryptocurrency, which eventually are created in order to circumvent sanctions and debt relief to the otherwise serious and legitimate the adoption of cryptocurrencies will be endangered”.