Venezuela On The Brink, Putting Petro’s Future In Doubtbr>
Chaos reigns in Venezuela, as opposition leader Juan Guaido has declared himself the legitimate leader of the country and has been recognized by the United States as such. That means existing President Nicolas Maduro will need military backing to stay in power.
While the country descends into a possible civil war – or even a military conflict with the US – the future of the petro, the national cryptocurrency, will come into focus. On Monday, Maduro declared a “new monetary system” backed by the petro, which itself is tied to the country’s massive oil reserves. The idea was to shore up the bolivar, the official currency of the inflation-hampered country. One petro was declared to be worth 36,000 bolivars.
To give an idea of its scope, under Maduro’s plan, the Venezuelan minimum wage went from 4,500 bolivars to 18,000 bolivars (around $6.52 USD). In 2018, the minimum wage was raised five times.
However, now that Maduro’s future is in doubt, the future of the petro must also be in question. Originally designed to circumvent sanctions against the country, the petro has been murky. Despite claims of a pre-sale worth some $800 million, little evidence has emerged that anyone bought or holds it. The cryptocurrency lacks a wallet, and any purchases have to be made at six somewhat obscure crypto exchanges. Once purchased, only a certificate of purchase is delivered.
Guaido was reportedly held by members of the intelligence service on Sunday, but then released. He has been critical of Maduro’s economic plans.
“Today, Nicolas Maduro mocks the Venezuelan people, once again, after taking economic measures that only bleed more in the pocket of Venezuelans,” Guaido said.
Since the situation is rapidly unfolding, it’s likely that the petro’s future is uncertain at best, doomed at worst.