Photo: FayerWayer retrieved

Since its launch in February, the government has tried to push the cryptocurrency petro as the lynchpin of its economic plans: from tying it to the bolivar reconversion to including it in the price system of goods and services. They’re even forcing banks to show it in your accounts.

Make no mistake: Nicolás Maduro wants the petro to happen. But is it working?

A new special report by Reuters tries to answer that question. SPOILERS: It isn’t.

For example, they tried to verify the alleged excellent sales that Maduro boasted about on TV. When they wanted to contact the State entity in charge of cryptocurrency, the answer was:

“The Superintendence of Cryptoassets, the government agency that oversees the petro, is a mystery. Reuters recently visited the Finance Ministry, where the Superintendence is supposed to be housed, but was informed by a receptionist that it ‘does not yet have a physical presence here.’

“The Superintendence’s website is not functioning. Its president, Joselit Ramirez, did not respond to messages on his personal social media accounts. Phone calls to the Industry Ministry, which oversees the agency, went unanswered.”

Reuters also tried to find petro buyers without much success, as the government doesn’t provide records.

Reuters also tried to find petro buyers without much success, as the government doesn’t provide records. An anonymous buyer says everything went smoothly, and blames the U.S. for the petro’s bad rep, yet another feels “scammed.” Experts on the subject doubt that the currency is actually trading at all and most digital currency market sites don’t deal with petros.

There’s one exception: India-based Coinsecure, which started dealing them shortly after suffering a huge heist of 3 million dollars worth of Bitcoin. There’s more: some believe it was actually an inside job. ThinkingEmoji.jpg

Meanwhile, the town of Atapirire, Anzoategui, deals with the ordinary Venezuelan pains: blackouts, decay, hunger and despair. Nothing about petros in sight, which is odd, since that’s where part of the oil reserves allegedly backing the petro are.

After its formal announcement last December, Caracas Chronicles has followed the petro, asked about its alleged premise, legal implications and even its possible guisos; we knew it was a scam and here’s Reuters now, finding all sorts of shady bits as well.

Read the entire piece. An excellent work by Brian Ellsworth and the entire Reuters team.

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11 COMMENTS

  1. Maduro is sinking and he knows it, so in desperate fanciful thinking some idiot sold him Petro which gives him hope of making things right. It is typical superstitious (also known as postmodern) thinking.

    You have terminal cancer and you go to a brujo which gives you un ensalme…

    • In all honesty, that is very likely wishful thinking. My brother has actually bought some crypto currencies, (since abandoned that idea) and he says he cannot find a legitimate dealer for the Petro. No one is buying because nobody knows where it can be purchased, let alone the terms of purchase.

      It is the ultimate scam. If it wasn’t, Russia would be buying shitloads of them, as their currency is in the shitter. (75% of Russians save in currencies other than the ruble, according to banking sources in Russia.)

      Maduro reminds me of a guy I met about 25 years ago who wanted me to invest in his real estate empire… I would give him $XXX,XXX and he would buy properties and manage them. I started asking questions about what sort of say I would have in such properties, and he told me, “No…no… you are a ‘silent investor’ who gets to reap all the rewards while I do all the hard work!” I wouldn’t get to see the books, se the properties and I wouldn’t have any sort of authority… I was supposed to “sit back and watch the money roll in”! About 2 years later, his name was in the paper for being a slum lord who bilked his ex wife and investors out of about $300K. He was banned from renting properties in the county, and ended up taking his snake oil show to Iowa.

      Caveat emptor.

  2. “Make no mistake: Nicolásno Masburo and all of top his bosses want the petro or any other scam to happen”.

    Fixed.

    “we knew it was a scam and here’s Reuters now, finding all sorts of shady bits as well.”

    Blessed clairvoyance. Then again, what isn’t a scam in Klepto-Narco Cubazuela?

  3. “The Petro that Wasn’t There”

    Under Chavistoide Tropical Kleptomania nothing was or will be “there”: Water, electricity, progress, security, hope, moral values, education, laws, production, environment, infrastructure, opportunity – nothing. And under any future corrupt MUDcrap ‘democratic’ ‘government’, not much will be there either.

  4. The Petro is backed by a promise to pay the market price of a barrel (of some grade) of heavy crude. Since oil is priced in dollars, that would be in dollars. The missing link is that if you go to a bank with a Petro in your cyber-wallet, and ask for $66 dollars, the most they’ll give you is their laughter (maybe a sympathetic smile.)

    The same goes for the recent gold certificates.

    I can see easily how the Petro “is linked to the dollar” – if that link existed. With gold or silver backed currency, the promise is to deliver the commodity in exchange for the note. Beyond that, it all gets into the theory and practice of “fiat” currency, which is backed by nothing more than other people’s confidence that still other people will accept it as payment (for actual goods and services, or in exchange for other currencies or commodities, etc.). That confidence is based on assessments of the health of the economy, the balance of trade, the government reserves, regulation of the banking system, interest rates, and other factors such as strict control and regulation of the money supply, and the budget surplus or deficit.

    A sidenote on practicalities and credibility, here. In statistics, as in the compilation of samples of a population which can be held to represent the entire population. you do not have to survey an entire population. A surprisingly small percentage, if sampled correctly and randomly, will do to provide a level of confidence about 96% (IIRC). So you see in surveys, “margin of error 4%”, indicating that the sample size allowed for that 96% confidence. If a random sample of the population of Venezuela, holders of Petros, could in fact redeem their Petros for $66 bucks, then pretty soon the Petro might gain stability, or credibility, in that the population as a whole would feel assured that they could redeem for $66 dollars (or whatever the going price of crude was on that day). And in turn, it would be accepted, and it would in fact be linked to the dollar, through the price of crude (whatever grade that might be). End of sidenote.

    But, as with the gold certificates, there’s that missing link: the redeemability.

    What I have trouble with is catching how the Petro could be linked to the bolivar. Economically, that is. Rhetorically, it’s easy. Maduro has already done that – for everyone – as a public service of course. Actually, not “linked”, but “anchored”.

    Does anyone here see how the bolivar is “anchored” to the Petro, or the other way around?

    Assume what has not happened as far as I know, that one can indeed take a Petro to the bank and get $66 dollars for it. The best I can do so far, is that the intent is to replace the bolivar with the Petro, so that the Petro becomes the unit of measure of currency. With that in mind, then the bolivar become the “little sister” as it were, of the Petro. Or, in alternate analogy, the Petro would be the dog, and the bolivar the tail it wags around. The bolivar would serve as the small change for everyday transactions.

    But in order for that to happen, banks would have to not only redeem Petros for dollars, but also redeem Petros for bolivares, at a fixed exchange. “At a fixed exchange” is the link or anchor, there. As with any currency, it has to be backed by the issuer. The bolivar, right now, is not linked to anything, and no one really believes in it much anymore, and so there is hyperinflation. The regime would like the population to rely on their paper promises? In an economy that is collapsing, in partial default, electronically printing money suppl like water from a burst dam? The credibility and confidence that is the luxury of sound economies and governments is not there.

    So to anchor the bolivar, it would have to be at a set or fixed or guaranteed exchange rate, for Petros. Otherwise, the bolivar just floats (or sinks) as it has been doing on the “black market”. If we take the Petro value at $66 dollars, then by approximate bolivar / dollar exchange rates, good for the day only, at 87 sovereigns to the dollar, one Petro would get you about 5742 sovereigns (66×87=5742). If banks were willing to back that up, the bolivar would be anchored to the Petro. But chances are, everyone would prefer to have the $66 dollars.

    The problem is the missing link. Or the missing anchor. In the inverted, upside-down world of socialism, that anchor seems to be hooked to nothing more than clouds in the sky.

    Does anyone see any better, how the Petro is anchored to the bolivar or vice-versa? I mean, assuming that the Petro could be redeemed by any holder for the market price of a grade of crude at any bank?

    To recap: the whole idea is crude oil sold by PDVSA (Venezuela) for dollars. Those dollars would then be available to Petro holders, through banks, on redemption of their Petros. So wages and prices denominated in Petros would in effect be dollar-anchored. But the bolivar still floats on the black market, losing value to the dollar, and to goods and services, and to the price of a barrel of crude, every day. To anchor the float of the bolivar, Venezuela, through all banks, would have to accept a fixed number of bolivares for each Petro.

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