Why is not the “petro” really a cryptocurrency?

10 000 question challengeCategory: Law and regulationsWhy is not the “petro” really a cryptocurrency?
HowToToken Team Staff asked 3 years ago
1 Answers
anonymous answered 3 years ago

There are multiple reasons why the “petro” (alleged cryptocurrency issued by the Venezuelan government) can not be considered a cryptocurrency:

– It is directly supported in a nation’s mineral resources: by definition the value of cryptocurrencies is given by supply and demand, not directly by goods (mostly mortgaged because the Venezuelan economy is practically in default).

– It will be controlled by a government entity: taking away all the decentralized character that a cryptocurrency should have, in addition, that anonymity would be non-existent.

– Only the Venezuelan government will be able to mine it: besides being a static model, this allowed the Venezuelan government to generate an arbitrary and unlimited amount (for example, bitcoin has a limited amount) of “virtual currency” (as it has done with its printing of bills) generating a kind of inflation

– It would go against economic sanctions imposed by the U.S. Treasury Department’s: Since a few months ago, the US treasury department sanctioned the Venezuelan government for human rights violations, anyone who trades with this currency could be punished.

source: https://www.investopedia.com/news/venezuela-petro-not-cryptocurrency/