Petro

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Petro (PTR)
Petro.png
Founded 2017
Headquarters Venezuela
Key People Nicolás Maduro, President of Venezeula
Products Petro digital token
Website Petro Home Page (English)

The Petro (PTR), a commodity-based stablecoin, became the national cryptocurrency of Venezuela in 2018.[1]

Overview[edit]

Venezuelan President Nicolas Maduro introduced the Petro to the citizens of Venezuela in his regular weekly broadcast on December 3, 2017. It would, Maduro said, introduce the country to 21st century payments technology.[2]

The Petro became the country's second official currency on August 20, 2018. According to Maduro, the value of the stablecoin is to be tied to the country's domestic production prices for oil, gold and other minerals as well as the "Bolivar," Venezuela's official fiat currency. [3][4][5] The mechanism for connecting the value of the Petro to the natural resources' values had not been fully disclosed publicly at the time of the launch.[6]

Issuance[edit]

Presale[edit]

In February 2018 Maduro announced the launch of the Venezuelan national cryptocurrency, the Petro for later that year. Development of the currency was said by the government to have been a response to the devaluation and loss of confidence in the Bolivar, the Venezuelan national fiat currency.[7] On March 19, 2018, the administration of U.S. president Donald Trump announced, among other measures, a ban on U.S. citizens purchasing or holding Petros.[8]

At first, the value of the Petro was designed to be tied to the Bolivar fuerte ("strong").

Originally claimed to be based on Ethereum ERC-20 tokens, the first Petros were instead issued on the NEM blockchain.[9][10]

In March, the government issued 82.4 million tokens on the NEM blockchain as part of the ICO. Those appeared to correspond to a set of “preliminary” coins described in the white paper that buyers could later swap for Petros once the ICO was complete. [11] Equivalent to about $!50,000, approximately 2,300 tokens were transferred to 200 anonymous accounts in early May, NEM records show.

According to Reuters, which published a first-hand investigative report on the Petro in late August 2018, an anonymous NEM account issued a different set of Petro tokens that it described as part of a separate phase aimed at major investors. That account in June transferred a total of around 13 million tokens to about a dozen anonymous accounts, NEM records show. Those tokens could have been worth about $850 million at official prices to the Venezuelan Treasury. Reuters warned that the information could not be verified, although, as it noted, ". . . no large investors have admitted to taking a position in the Petro."[12]

Maduro said in April that the Petro pre-sale had raised $3.3 billion, $1 billion of which would be deposited into the country's central bank.[13]

ICO[edit]

The Venezuelan president announced on August 14, 2018, that as of August 20 the Petro would become the official second currency of Venezuela and that the PVDSA, the nationalized oil industry of Venezuela, would be required to use Petros in its accounts. On August 20, 2018, the Petro was officially adopted as the country's second official currency.[14][15][16] On the same day, the transition from the Bolivar fuerte as the national fiat currency to the Bolivar soberano ("sovereign") began at an exchange rate of 100,000 fuertes for one soberano.[17]

By the end of August, the Petro had seen almost no local financial interest in Venezuela. Many Venezuelans blamed sanctions placed by U.S. President Donald Trump forbidding U.S. citizens from investing in the digital currency. By this time, the Petro had not been listed on any major cryptocurrency exchange.[18]

In October 2018, Venezuelan President Nicolás Maduro announced that the public sale of Petro would begin November 5, 2018. At the time of this announcement, only one wallet supporting Petro had been developed, a mobile wallet available to Android users.[19]

"Clone" of Dash[edit]

In October 2018, Ethereum developer Joey Zhou tweeted that the developers of the Petro had blatantly "cloned" the altcoin Dash. He cited various examples from Petro's whitepaper that appeared identical to that of Dash.[20]

Forking[edit]

The Venezuelan government was suspected of surreptitiously hard forking the Petro when it took the cryptocurrency offline for maintenance for five days in May 2020. Once the blockchain was relaunched, according to the online news service CoinTelegraph, the Petro's genesis block, the first block in a blockchain, was dated May 5, 2020, according to the official block explorer. Other block explorers record October 13, 2018 for the generation of the genesis block.[21] A blockchain fork occurs when the blockchain diverts onto a separate chain of blocks.

Public implementation[edit]

In December 2018, the Caracas Chronicles, a local newspaper in Venezuela, reported that the Venezuelan government had converted the pensions of government employees to Petros.[22]

In July 2019, President Maduro ordered Banco de Venezuela, Venezuela's national bank, to open Petro trading desks and accept deposits of Petro at all three of its branches in the country.[23]

Travel restrictions[edit]

In October 2018, Maduro announced that all Venezuelan citizens seeking to buy passports would be required to do so using Petro; this announcement came a month before the announced start date for the public sale of the cryptocurrency, making the cost of acquiring a passport in Venezuela four times the national monthly minimum wage. According to data gathered by the United Nations, approximately 5,000 Venezuelan had been leaving the country each day.[24]

Petro giveaway[edit]

In December 2019, Maduro announced that public employees and pensioners in Venezuela would be given half a Petro for Christmas.[25] At the time of the giveaway, one half Petro was worth about $30 U.S. dollars. Recipients reportedly spent their windfalls quickly.[26]

Adoption[edit]

Against a backdrop of uncontrolled hyperinflation and widespread dollarization in the economy, the Petro was reportedly used to pay for gasoline purchases at filling stations about 15% of the time in March 2021. Approximately 8 million government workers received a $30 bonus paid in Petros at the end of 2020.[27]

References[edit]

  1. Maduro’s Petro cryptocurrency will be an official currency in Venezuela – like the Bolivar. The Next Web.
  2. Maduro's 'Petro' Cryptocurrency Will Join Chavez's Bolivar Fuerte, In The Graveyard. Forbes.
  3. Maduro’s Petro cryptocurrency will be an official currency in Venezuela – like the Bolivar. The Next Web.
  4. Maduro Adopts the Petro as Venezuela’s Second National Currency. NewsBTC.
  5. Venezuela pegs bolivar to cryptocurrency to save country from economic collapse. The Independent.
  6. Special Report: In Venezuela, new cryptocurrency is nowhere to be found. Reuters.
  7. Venezuela Launches Virtual Currency, Hoping to Resuscitate Economy. New York Times.
  8. White House Bans Venezuela’s Digital Currency and Expands Sanctions. New York Times.
  9. Maduro’s Petro cryptocurrency will be an official currency in Venezuela – like the Bolivar. The Next Web.
  10. Here's What Maduro Has Said of Venezuela's Petro Cryptocurrency. Bloomberg.
  11. Special Report: In Venezuela, new cryptocurrency is nowhere to be found. Reuters.
  12. Special Report: In Venezuela, new cryptocurrency is nowhere to be found. Reuters.
  13. Here's What Maduro Has Said of Venezuela's Petro Cryptocurrency. Bloomberg.
  14. Venezuela to Peg Pension, Salary Systems to Petro Cryptocurrency. Coindesk.
  15. Crypto is Taking Over Venezuela, Due to the Country’s Destroyed Fiat System. NewsBTC.
  16. Here's What Maduro Has Said of Venezuela's Petro Cryptocurrency. Bloomberg.
  17. Venezuela 'paralysed' by launch of sovereign bolivar currency. BBC News.
  18. Special Report: In Venezuela, new cryptocurrency is nowhere to be found. Reuters.
  19. Public Sale of Venezuela’s State Crypto Petro to Commence on November 5. CCN.
  20. Venezuela’s Petro White Paper ‘Blatantly’ Copied Dash, Ethereum Developer Says. Cointelegraph.
  21. Venezuela Appears to Have Hard Forked The petro. CoinTelegraph.
  22. Petro Forced Upon Pensioners by Venezuelan Government. Finance Magnates.
  23. Banco de Venezuela Must Accept Petro Cryptocurrency, Maduro Says. Finance Magnates.
  24. Crypto Now the Only Way Isolated Venezuelans Can Buy Passports. Bloomberg.
  25. Authoritarian Airdrop: Maduro ‘Gifts’ Petros to Venezuelans for Christmas. Coindesk.
  26. Venezuelans Flock to Stores in their Droves to Spend Petro Payouts. CryptoNews.
  27. Venezuelans try to beat hyperinflation with cryptocurrency revolution. DW (Deutsche Welle).
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