Earlier this week, Venezuelan President Nicolas Maduro claimed that a new state-sponsored cryptocurrency called the petro raised $735 million on the first day of its sale. ArsTechnica dives deep on the matter to suggest that it’s all a farce. From the report: The government hasn’t provided any way to independently verify that $735 million figure. And there’s reason to doubt almost everything the Venezuelan government has said about the project. Moreover, there’s little reason to believe that the petro will maintain its value over time. The Venezuelan government has portrayed petro tokens as backed by Venezuela’s vast oil reserves, but they’re not. The government is merely promising to accept tax payments in petros at a government-determined exchange rate linked to oil prices. Given the Venezuelan government’s history of manipulating exchange rates, experts say investors should be wary of this arrangement. Moreover, the petro scheme has been opposed by opposition legislators in Venezuela’s opposition-controlled legislature. They say that the Maduro government is essentially issuing oil-backed debt, and legally that can’t be done without approval from the legislature. If Maduro falls from power in the future, his successor might refuse to honor petro redemptions.
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