What Was Petro Gold?

Petro Gold was a cryptocurrency created by the governm෴ent of Venezuela in an attempt to access capital to fuel a much-needed economic reꦺcovery. The currency was launched in February 2018 and was reportedly backed by gold, but the project failed to gather enough interest from investors or the population to become a useful currency.

The cryptocurrency's launch followed another similar cryptocurrency, the Petro. The Petro was to be pegged to the value of oil. Venezuela's cryptocurrencies used blockchain technology and were regulated by the nation's cryptocurrency watchdog, SUNACRIP. Ironically, the watchdog agency was disbanded and restructured in March 2023 following the arrest of agency leadership involved in a fraud and theft ring.

Understanding Petro Gold

Venezuela claimed that Petro (not Petro Gold) attracted 171,000 certified purchase orders, valued at $735 million, on the first day of its pre-sale on Feb. 20, 2018. The government claimed that its value would be pegged to the value of a barrel of Venezuelan oil. However, its whitepaper announced that the oil allegedly backing each token was proven reserves—the best estimate of the amount of oil it could extract from the ground—meaning it hadn't even been drilled for at the time the cryptocurrency was announced.

One day after the first state-issued cryptocurrency was announced, President Nicola Maduro announced a second token in February 2018 called Petro Gold. Petro Gold's value was set to be pegged to the value of gold and other precious metals. It was unclear if this peg was to be linked to gold produced in Venezuela or gold within the country's reserve. Maduro promised that Petro Gold would be influential in the country's economic recovery because it would strengthen the Petro.

Venezuela's digital currencies were touted as money that could be used through 澳洲幸运5官方开奖结果体彩网:digital wallets, payment systems, and exchanges. Users were required to create a wallet through the country's "PetroApp" before they could begin using the tokens.

History of Petro Gold

In 2019, Maduro launched a campaign to speed up the country's adoption of Petro. In a tweet on July 3, 2019, he said, "I give the express order to open El Petro transaction ticket offices in all Banco de Venezuela agencies." The order came on the heels of an initiative to give away one million cryptocurrency wallets with a small amount of Petro in them to young Venezuelans, in addition to education about how cr🤡yptocurrency works.

In another tweet, Maduro said, "The Petro is a marvel and a miracle that reaches our workers and retired workers of the country in order to make their purchases. It is a unique and extraordinary new experience of our economy. We are an example to the world!"

Ultimately, Petro Gold didn't make it far after its initial issuance. The Venezuelan public and investors worldwide seem to have decided not to participate in another apparent 澳洲幸运5官方开奖结果体彩网:financial scheme by the country's government.

Criticisms of Petro Gold

The Petro Gold announcement marked further efforts by the Venezuelan government to circumvent 澳洲幸运5官方开奖结果体彩网:economic sanctions placed on it by the U.S. and other developed countries. In fact, the U.S. Treasury Department claimed that Venezuela’s cryptocurrency potentially violated international sanctions.

Skeptics pointed out that the rampant inflation of the bolivar, Venezuela's collapsing economy, and growing debt problems made it highly likely that the government would be willing to 澳洲幸运5官方开奖结果体彩网:manipulate the value of its cryptocurrencies. They also felt this would leave little recourse available to token hoꩵlders.

Special Considerations

In January 2021, the annual 澳洲幸运5官方开奖结果体彩网:inflation rate in Venezuela eased to 2,665%, according to the Central Bank. Although not as high as it once was (it waꦦs estimated to have gone higher than 30,000% in 2019, amid continuing shortages of staple goods and growing civil unrest), the country's inflation rate remains elevated as a result of the continued depreciation of the bolivar due to the global pandemic and a lack of national oil production.

The government announced an annual inflation rate of 436.3% in April 2023 and 282.8% at the end of 2023. However,🤡 the socialist regime is very secretive, so it is difficult to ascertain whether any information published is accurate.

The Bottom Line

Petro Gold was a cryptocurrency designed and issued by the Venezuelan government. The idea failed to be adopted by the country's citizens and investors, resulting in the project's eventual demise.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes online. Read our 澳洲幸运5官方开奖结果体彩网:warranty and liability disclaimer for more info. As of the date this article was written, the author does not own cryptocurrency.