Venezuela’s freshly-created cryptocurrency is still in the hot seat. With the country’s parliament declaring this currency illegal yet again, the future of the Petro is in question. Even so, it seems the Petro will be auctioned off to private companies through the Dicom foreign exchange platform over the next few weeks. A batch of conflicting reports only makes this all the more difficult to understand.
What Comes Next for the Petro?
Most people already know that Venezuela’s Petro cryptocurrency is a very controversial creature in many different ways. After all, it is a new form of money which was created pretty much out of thin air, even though it is allegedly backed by the country’s vast oil reserves. On paper, it also allows the country to bypass any sanctions imposed upon the nation by the United States or any other country.
That is one of the main problems people have with the Petro cryptocurrency. It is an unsanctioned form of money which would allow investors to get a stake in the country’s economy, even though they are not allowed to do so under the current embargoes imposed upon Venezuela. Bypassing these measures – for whatever reason – could lead to major legal repercussions, although it remains to be seen if that will change.
The future looks pretty interesting for the Petro as of right now. According to Venezuela’s vice president, Tareck El Aissami, a new sale of the Petro will commence very soon. More specifically, a fair amount will be auctioned off to private companies through the Dicom foreign exchange platform. This sale is expected to materialize in the coming weeks, although no specific date has been announced just yet.
This development is considered highly controversial for many reasons. For one thing, half of the Venezuelan government has declared the Petro to be an illegal form of money on multiple occasions. The most recent warning was issued just this week, as the government has called the Petro an “illegal debt issue”. The US Treasury Department is not too happy about this new currency either, and it issued a stark warning on the matter not long ago.
When the Petro auctions begin, it will be interesting to see how much interest there is in this particular form of money. Considering how controversial it is already, few international investors may be all that interested in dabbling in this market. Since no one knows how the Petro will function as an actual form of money – let alone a foreign currency – there is no reason to invest in it. Even Venezuelan businesses are not too certain about how the Petro will affect their international transactions.
As long as Venezuela’s new cryptocurrency remains shrouded in controversy and potential legal issues, there will be no global acceptance of this form of money. It is unclear who is buying this currency, or what they hope to achieve by doing so. For now, the Dicom auctions are mainly targeting Venezuelan banks, which can buy the Petro at a big discount.