Petro, the attempt of Venezuelan government to enter the cryptocurrencies market

Without any doubts, the main cryptocurrencies in the market are getting stronger this year like never before. Since the creation of Bitcoin, this new platform of currencies trading could be the key to the future. But several specialists and banks around the world consider that all the new ‘coins’ in the market have to pass some tests before their final consolidation in financial systems around the world.

And here’s an issue that actually creates serious discussions between specialists: Should governments take the total (or partial) control over the cryptocurrencies transactions? Well, Nicolas Maduro, president of Venezuela, brought up the issue in a recent speech from December 3th, announcing the creation and implementation of Petro: a cryptocurrency controlled by the Venezuelan state and backed up by its national reserves of oil, gold, and other resources.

Let’s take a look at some important aspects of Petro.

Could Petro be successfully implemented?

In Venezuela, most of its citizens face the lack of foreign currencies and the aggressive inflation that decrease their purchasing power, so they had to start the mining of cryptocurrencies in order to perceive incomes that allow them to maintain their lifestyle and overcome the strong financial crisis in Venezuela.

If we consider the legal aspects of mining and trading with cryptocurrencies in that country, there’s not a law or a legal system that could regulate the economic activities mentioned before. Also, it’s still unknown the platform of Petro and if it will be just another payment solution controlled by the Venezuelan government.

The opinion of Andrés Guevara, financial expert of Administration Higher Education Institute (AHEI) is that the Venezuelan government has not been capable of managing the free commerce of currencies, neither Maduro revealed a detailed plan for the Petro and its transactional and security system. Also, the secrecy of the numbers of Venezuelan economy by their government makes very difficult to know the details or Petro and its platform. This new cryptocurrency could be a startup without encouragements to investing by traders in Venezuela and other countries.

Could the Petro be a private cryptocurrency?

The privacy in cryptocurrencies is a very important encouragement for investing. While the IP address can’t be known in the traders’ hosts, Petro cryptocurrency and its associated platform produce some doubts about its privacy according to Venezuelan government behaviors that are known for limiting individual freedom. So, could be Petro a tracking and controlling instrument disguised as a cryptocurrency? Now is really difficult to know.

Conclusion

Several days after announcing of the creation of Petro, we have to consider some factors that generate uncertainty about this new cryptocurrency and its platform: the unknowing of its functioning, the lack of transparency of Venezuelan government related to the economic numbers, and it is entering on a default situation. However, we have to research and update about Petro and its functioning. Maybe this could be a good alternative for Venezuelans and other investors to fortify and diversify their financial resources, but this will only happen if the market can trust on it.