Social media has been abuzz since Tuesday’s official launch of the Venezuelan government-backed cryptocurrency, the petro – though the reviews are very mixed.
On Tuesday, Venezuelan president Nicolas Maduro claimed that the country had collected a whopping $735 million during the first day of its presale for the new cryptocurrency. In spite of a lack of proof, the claim came amid a splashy, nationally-televised broadcast where Maduro himself declared that “we have taken a giant step into the 21st century.”
Venezuela’s government first unveiled the petro back in December, setting up a dedicated government agency to oversee the development of the cryptocurrency as well as an ecosystem for it within the South American nation. In anticipation of the sale, the government published a white paper, a buyer’s guide and, most recently, newly crafted rules for creating cryptocurrency exchanges within Venezuela.
The initiative has sparked a range of tweets in support – and in opposition – to the idea, buoyed by a dedicated hashtag, #AlFuturoConElPetro (which translates to “to the future with the petro”).
For instance, one advocate tweeted, “The new economic era for Venezuela begins. The newborn criptomoneda called el petro has many challenges ahead, but its armoring will be the potential for the progressive regularization of the economy.”
Perhaps unsurprisingly, members of the country’s National Assembly – which is controlled by political parties in opposition to Maduro – have blasted the move, including in statements issued just hours after Tuesday’s broadcast event.
Among those taking a public stance against the petro is Marialbert Barrios, a National Assembly deputy who asked: “Who in their right mind buys a [cryptocurrency] from a government that does not pay the foreign debt, with an economy in hyperinflation?”
She also warned:
El Petro será canjeable por dinero fiduciario y otros criptoactivos a través de casas de cambio digitales. El Estado aceptará el pago de impuestos, obligaciones, tasas, contribuciones y servicios públicos nacionales en Petro. #AlFuturoConElPetro
The pushback from the Assembly comes amid an acute political standoff between opposition forces and the Maduro government. According to Reuters, opposition parties are expected to boycott an upcoming presidential election in April, which they argue is rigged in Maduro’s favor.
Deputy Rafael Guzman called the cryptocurrency “fraudulent,” reiterating past arguments that it will fuel illegal activity.
“[The] petro is a fraudulent, illegal and invalid mechanism for the government to continue its shady business and money laundering, because it is not known where those resources will come from,” he wrote.
Base of support
In contrast with the denunciations from the opposition-controlled Assembly, various offices within the Venezuelan government have used their social media presences to boost agencies that promote the petro.
Among those is SENIAT Venezuela’s tax and revenue authority, which claimed that residents can use the petro to pay their tax liabilities, among other things:
Local bitcoiners raise concerns
Yet, turning back to the opposition, politicians in Venezuela aren’t the only ones pushing back against the idea.
While the skepticism voiced by Venezuelan opposition lawmakers could be seen through the lens of the ongoing political crisis in the country, the critiques put forward by members of the local bitcoin and cryptocurrency community are more nuanced and focused on the fact that the Maduro government will likely wield significant control over the cryptocurrency it’s creating.
In a post on the “BitcoinVenezuelabtcven” Facebook group, one commentator wrote that it is “really worrying” that the government would exercise such a large degree of control, especially considering the wide-reaching push for people to start using it.
The fear, he said, is that the government will have “the absolute power to manipulate and adulterate the blockchain at will over petro”.
Through that lens, others said, the petro isn’t much of a decentralized cryptocurrency at all. “That’s what makes the petro a debt bond and not a crypto in itself, plus the danger of these guys behind that project,” one community member wrote.
Yet another observer offered a broader take, posting in the Facebook thread:
“Tyranny is that: [a] monopoly of power in the hands of a political class that only cares about its space.”