CARACAS — The Petro (PTR) is a “cryptocurrency” that was invented by the government of Venezuelan President Nicolas Maduro. The Petro was proposed in late 2017 in a national television broadcast. After considering launching the Petro on two different blockchains (Ethereum and NEM), in October of 2018 the government decided to use its own permissioned blockchain, based on a version of the DASH blockchain.
But is the Petro really a cryptocurrency? Probably yes, in the sense that it has a blockchain where each transaction is linked to the previous one and can be verified in a block browser. The Petro blockchain has about 42 connected nodes and has registered more than 27,180 blocks of registered transactions, according to its block explorer. I have personally made transactions with the Petro, and my address and the other person’s wallet address were both registered on Petro’s browser. Just to try it out, I used Petro to buy a little power bank in a Petro Store at a government-sponsored event.
The Petro may look like a cryptocurrency, except for the fact that it is completely centralized. To use the Petro, you have to trust the government of Venezuela. There is no way to connect to the Petro network without government permission. The Petro’s code is not public, and there is only one block explorer and one official wallet.
The Petro is active, even if it appears to be dead
The Petro is not dead, it is just so low key that even the Venezuelan government doesn’t really bother to promote it. Just look at the official Twitter account of Sunacrip, the organization in charge of the Petro and other cryptocurrencies in Venezuela. Sunacrip’s account is now basically devoted to government propaganda, not for teaching Venezuelans how to use the Petro. Even Venezuela’s main government television channel hardly mentions the currency that was supposed to be the salvation of the Venezuelan economy.
Today, there are limited ways to access the Petro. The simplest is to go to the official Petro Web site and buy Petro with Bitcoin or Litecoin. Your registration must be approved by the government, which also sets the exchange rate for the Petro. Since the Petro’s launch, the price of one Petro on the official Web site and the central bank of Venezuela's site has remained exactly $60 USD.
Another way to access the Petro is to buy certificates using bolivars (VES) or other currencies via Sunacrip’s main office, which very few people have used. The government also allows people to pay their pensions and receive social aid in Petro, which can appear more stable than the VES. There are Telegram channels that have enabled a bot system to act as a kind of referee between buyers and sellers.
You can also acquire Petros via one of the Venezuelan exchange houses that have been authorized by Sunacrip. This became public only recently with the case of the exchange Amberescoin, which enabled a PTR / BTC market with free purchase orders that can be viewed from time to time via their Telegram channel. In late April you could find orders for around USD $40 per Petro, much cheaper than exchanging via the official government Web site and with very low trade volume.
One interesting detail on this exchange is that in order to register you have to go through a know-your-customer (KYC) and anti money laundering (AML) process that might be stricter than the exchanges in the United States. Some exchanges in the US, for example, let me register with email first and then later to do KYC and AML. With Amberescoin you have to do KYC just to register.
Venezuelan exchanges appear to be operating in a low profile way so that their owners will not be sanctioned by the United States government for trading Petros. It’s worth asking some questions if the trade volume is being inflated, via wash trading or some other method, on some of these little known and inexperienced exchanges.
No one knows the real price of a Petro
So how much is one Petro actually worth? It depends on who you ask. If we go to the Web site of the Central Bank of Venezuela, 1 PTR equals 80,000 VES. The Central Bank’s exchange rate is 5,202.26 VES / $, meaning that the Central Bank of Venezuela believes that a 1 PTR is worth $15. And yet, as our chart demonstrates, the price varies widely.
In daily life, Venezuelans only hear about the Petro when banks list the Petro conversion of their balances, when the government uses the Petro price (1 PTR = 80,000 VES) as a unit of account for workers’ minimum wage, or when they receive pension payments in Petros without their consent. Sometimes products are sold in Petros at government events, or goods in supermarkets will have their prices listed in PTR. Otherwise, it would be hard for ordinary citizens to know that the PTR is still alive.
And why, exactly, is the Petro still alive? I believe that there are are two main reasons. The first is that the government is paying its internal suppliers with PTR, and maybe these suppliers accept PTR at an exchange rate that benefits them or because they have no other choice. The other reason is it that in addition to the government, there is a small group of people who are earning BTC or dollars from Petro price movements.
What we do know is that if the Venezuelan government is accepting payments in BTC and LTC in exchange for Petros, in addition to creating a cryptocurrency remittance platform, it means that the government wants to accumulate cryptocurrencies, probably to evade the economic sanctions of the United States.
The bottom line is that it is hard to trust an asset like the Petro. There is no real free market price, the only true supporter of this currency is the bankrupt government of Venezuela, and trading with Petros risks being sanctioned by the United States. Yet while the Petro may not be very reliable, this hasn’t stopped the Venezuelan government and a small group of people from continuing to use it.
José Rafael Peña Gholam is the Caracas-based editor in chief of CriptoNoticias.