



The Petro is a cryptocurrency but not like any other cryptocurrency it is back by a country. As you guys know the main problem with cryptocurrency is that the state does not regulate it. Petro is also backed by oil by Venezuela. So what happened with Petro? Why it became a flop? I am going to discuss this in the blog.



In 1983 the American cryptographer David Chaum conceived an anonymous cryptographic electronic money called Ecash.



In 1996 the NSA published a paper entitled How to Make a Mint: the Cryptography of Anonymous Electronic Cash, describing a Cryptocurrency system first publishing it in an MIT mailing list and later in 1997.



From the last five years, cryptocurrencies are started influencing the International market. In recent years use of these currencies had shown a significant amount of raise compares to its past. Many well-known international firms also started accepting cryptocurrencies. This creates a healthy atmosphere for cryptocurrencies.



Raising the value of cryptocurrencies attracts not only users but also Arbitrage and investors. This also helps to hike the uses of cryptocurrencies.



Main concern rose in the International banks and Govt. due to it started influencing the current banking system. Many countries have banned these currencies due to it is not regulated by a state or Govt. It is an unorganized sector, so technically it will cause a problem for the world in upcoming years.



But what is the problem with Petro? As you guys know it is under control of a Venezuela’s Govt. and they also backed currency. Let’s understand this in detail.

1. The ban on Petro – When the US takes a decision people mostly investors closely monitor the situation. When the US bans Petro that became a massive blow for Venezuela’s Govt.

President Donald Trump banned U.S. purchases of a cryptocurrency the Venezuelan government is rolling out, as part of a campaign to pressure the government of President Nicolas Maduro. He authorized Treasury Secretary Steven Mnuchin to issue any necessary regulations to enforce his order.



Many of European Nations also criticized the currency. Most of the economist said that it is a trap and the last step taken by Venezuela’s Govt. to push on some more days.

These central countries and unions verdict is essential and due to ban people in this county is not able to invest, and when you ban the US and European citizens, then you are talking about half of the people and one of the wealthiest people in the world. So this creates a problem with the sale of Petro.

2. Wrong timing – For the unbeaten run of business timing matters and in cryptocurrency world Venezuela has missed the timing of introduction of Petro.

Petro was introducing at a time when prices of cryptocurrency are falling. Due to falling in prices Petro did not get an expected opening.

To understand this let’s see in the diagram.

Petro was introduced on Feb.2018





- Fig in US$

As you can see in the graph price of cryptocurrencies is start declining in Jan. and Petro is introduced in Feb. So petrol is added when the market is falling.

The boom in the cryptocurrency market is started to decline from Jan. So technically Petro was introduced when demand is falling, and everyone is leaving the market.

Many strict rules are taken to this day against cryptocurrencies. Many nations and group of countries have taken steps to tackle cryptocurrencies.

It would be more profitable if Venezuela introduced it when these markets were in a boom. It might have attracted more people than today.



3. Lack of trust in Venezuela’s Govt. – This also a significant factor due to hyperinflation in the country there are very few people who trust in the Govt.

The opposition party also declared as illegal. There are more different factors in the country which led to people of the state and another world to trust the Govt.



Venezuela’s Govt. has taken some controversial decisions that triggered inflation as well as riots in the country. I have talked about this in my blog Venezuela's Hyperinflation.



This lack of trust influence people buying capacity and the US and many other unions also criticized Petro.

More than 27 people died per day protesting in Venezuela from 2017 since 2015 approx. More than 8,000 people died protesting.

Venezuela’s unemployment rate is forecasted to 33.35% till Dec 2018 and 44.31% till Dec. 2023.

Caracas is a capital city of Venezuela and ranked worlds 2nd dangers city with murder rate.

Approx. 87% of the population is weak, and 60% of those live in extreme poverty.

Due to these some factors goodwill of Venezuela is severely affected, and it reflected in the Petro.

4. Restrictions on Venezuela – Due to hyperinflation and riots in the country, Venezuela has faced various restrictions; many nations have imposed entry restrictions and trade barrios.

These restrictions have clamped the feet’s of Venezuela; it is right and evil as well because these restrictions will not allow Venezuela’s conditions to get worse, but on another side, these decisions are also restricted Venezuela’s attempt to overhaul the situation.

Due to these restrictions, people of another country is not freely able to invest in Petro as Govt. is keep monitoring every expects relating to Venezuela.

WASHINGTON/CARACAS (Reuters) - The U.S. Treasury Department on Tuesday warned that Venezuela’s proposed “petrol” cryptocurrency could violate sanctions against the OPEC nation’s socialist government, a statement that could dent investor appetite for the soon-to-be-launched token.



5. Decreasing the value of Bolivar –



