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Venezuela’s Token – a way out or a scam?

Feb 23, 2018 Posted /  8522 Views

Venezuela’s Token – a way out or a scam?

A northern cost based country of South America, Venezuela is going to launch its digital coin  named Petro. The nation is rich in oil resources and the president of the country,  Nicolás Maduro has claimed that each coin will be equal to one barrel of the nation’s renowned petrol. He further added that around 100 million petro tokens will be launched worth $6 Billion.

By issuing its own cryptocurrency, the nation is looking forward to raise hard cash and use the virtual token as a mode of payment with international clients. With the announcement regarding Petro, the socialist government of  Nicolás Maduro has isolated itself as major International Financing Agencies did not like the move.

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As per many analysts, this step by the president shows the desperation to secure hard cash as the economy is not in a good condition due to various Maduro’s socialist policies.

Talking about the current economic scenario in Venezuela, the country is facing a shortage of food and as per International Monetary Fund(IMF) reports hyperinflation can hit country by 13000%. The situation is very critical as the country’s traditional currency, Bolivar can also collapse.

Maduro’s opposition party has declared Petro an illegitimate currency because as per law, any new borrowing must be approved by legislature first. But Maduro skipped this important step and opposed government officials.

“Petro is not a cryptocurrency. This is a forward sale of Venezuelan oil,” - Lawmaker Jorge Millan

For the success of a cryptocurrency, it requires transparency and trust which is absent in case of Petro. As per critics prediction, Petro will not last for long and will end up being a Shitcoin- currency that becomes worthless after a point of time and considered as a scam.

On the countries current situation of Hyperinflation, an economist, Jean-Paul Leidenz said: “Who would give a vote of confidence to a bank that hasn’t even been unable to maintain public confidence in the traditional currency?”

To prevent further bad debts the president of U.S.A., Donald Trump has prohibited any sort of dealing in stocks and bonds and lending of money to the oil-state, Venezuela. Last month, US Treasury Department published a warning notice not to invest in petro as it can result in “an extension of credit”.

But the president of Venezuela, Maduro believes that the virtual token will be a huge success and has opened an online registration for miners. The miners will be selected on the basis of cryptocurrency transaction audition.

“The future is now, Venezuela is moving forward as an economic powerhouse.” President Nicolás Maduro

Maduro has proven his doubters wrong earlier as well. Things can go well for Petro unless Maduro lost the election or get out of power. With the emergence of the new government, the circulation of Petro would be banned.

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