Controversial may be the best word to describe Venezuela’s national cryptocurrency’s journey so far. The Petro was launched in late February by the South American country, and according to its whitepaper, every Petro token represents a barrel of crude oil in the oil-rich nation. The Petro has now received the Satoshi Nakamoto Prize in recognition of its “outstanding contribution to the development of the blockchain industry”. The award was given by the Russian Association of Cryptocurrency and Blockchain (RACIB) in a ceremony held at Moscow’s World Trade Center.
Adding To The Controversy
The award has heightened the controversial association between the Russian government and the Venezuelan government in regards to the Petro. When it was created, the Petro was seen as a way to circumvent the US government’s sanctions on Venezuela and help the nation revive its economy, with the Venezuelan president even sarcastically referring to it as the kryptonite that would help fight Superman (i.e., the US).
The controversy was greatly fueled by a Time report that claimed the Russian government had been working behind the scenes to help the Venezuelan government launch the crypto. According to a source who was not revealed in the report, the Russian president was an ardent supporter of the Petro’s development and looked at it as a way to evade sanctions by the US.
The Russian government’s involvement was handled through two intermediates who were closely tied to the highest echelons of the Russian government, the report further stated. The two, Denis Druzhkov and Fyodor Bogorodsky, were recognized as having been part of the Petro team by the Venezuelan president, Nicolás Maduro, who thanked them for their invaluable contribution.
Russia’s involvement with and support for the Petro stemmed from its desire to find a way to circumvent sanctions that had been placed on the country by the US and other major economic giants after its invasion of Ukraine. With the Petro, Russia hopes to achieve this and bring an end to the dominance of the US dollar in global trade, an aim it has expressed for a long time.
The US has been among the most vocal opponents of the Petro, with the US government warning its citizens against participating in the sale of the Petro or any other digital token offered by the government of Venezuela. According to the US Treasury, participating in the sale of the Petro would be considered an extension of credit to Venezuela, which is prohibited by the current US sanctions against the country.
Venezuela doesn’t plan to stop anytime soon, and has even announced plans to create a Petro Gold token, whose value will represent the country’s gold reserves. It remains to be seen just how much of an impact the Petro will have on Venezuela’s economy.