Traders Can Convert Petro into Other Digital Assets

By Chetna Phour

In a recent speech, the President of Venezuela said that

“Anyone who buys the Petro until Dec 31 will be able to convert it into any other digital currency.”

Jill Carlson, the digital asset analyst and former Wall Street bond trader, translated the speech.

Petro is a Venezuelan cryptocurrency which was launched by Government of Venezuela in February 2018. The cryptocurrency is backed by the oil and mineral reserves of the country. Petro is intended to supplement the fiat currency of Venezuela. Because of the extreme hyperinflation the national currency, Venezuelan bolivar has become worthless. For the citizens of Venezuela, it has become virtually impossible to buy daily essentials with Bolivar. For example, a chicken costs 14,600,000 Bolivar in Venezuela. Petro is supposed to operate as the new national currency of Venezuela in the region.

Also read: Petro is a Legal Tender in Venezuela

In the official whitepaper of Petro the detailed usage of cryptocurrency in payment of national taxes and fees were described but the whitepaper failed to state that Petro is equivalent to a certain amount of the oil reserve of the country. According to the whitepaper,

“The Bolivarian Republic of Venezuela guarantees that it will accept Petro’s as a form of payment of national taxes, fees, contributions and public services, taking as a reference the price of the barrel of the Venezuelan basket of the previous day with a percentage discount of DV.”

In the presale of Petro which was ended on 19th March 2018, 38.4 million tokens made available. According to the government, the pre-sale raised $3.3 billion. In the second phase of Petro launch 44 million tokens were sold. The Venezuelan government believes that the main selling point of petro is the oil reserve of the country.

Peter Todd, an applied cryptography consultant, said that the main purpose of cryptocurrencies is to move money and audit it without the permission of anyone while Petro does exactly opposite. Petro is controlled by the government, and the government decides how and when the users will trade the digital currency.