THE PETRO CRIPTOMONEDA VENEZOLANA
Although the Venezuelan government puts all its trust in this cryptocurrency, there are many doubts, and gaps in information on the part of the same state regarding the true operation, transactions and veracity of the same with the use of petro.
Today there are many critics of analysts, economists, national and international with respect to this cryptocurrency, it can be said that there has not yet been a positive pronouncement from the international and national community, which would allow to be happy with the launch of the petro as a mechanism of strengthening of the economy of the country which is submerged in a great crisis. The only ones that offer positive figures based on the theme are the representatives of the national government.
This launch is being sold as a great alternative for the growth and economic stability of the country. But ... what is really the value of the petro, a barrel of oil, in a state that has a deficiency in its currency (dollars), how would the petro be changed to the people who want to exchange it for that amount of dollars that the barrel costs? Petroleum. Is it necessary to take out the barrel of oil or the gold that is worth to pay it? How much does it cost to get a barrel of oil or to exploit the gold?
Added to this, with an oil industry that according to the latest investigations shown by the Attorney General of the Republic is broken by the great corruption that exists in it; empty spaces are evident in oil installations because their workers have left their place of work, emigrating or other countries seeking better living conditions, where production is constantly stopped for lack of necessary tools and equipment, where the constant thefts of drills stop the production, among other actors that currently affect the industry.
All the previously exposed has made Venezuela not have an optimal level of production, added to this is added the constant declarations of international governments that do not accept transactions with this cryptocurrency and that reject, such is the case of the United States.
The only thing that is known about petro today is the following:
Who can buy it, how much is it worth and how much can I change it?
Whoever wants it can, from this Tuesday, state his intention to buy petros. In this pre-sale phase the idea is to check the appetite of the market. The government hopes to attract investors from Qatar, Turkey, as well as from the Middle East, Europe and the United States in the pre-sale of its digital currency.
Each petro has as a reference value the price of a barrel of oil, of which Venezuela is considered the country with the largest proven reserves in the world, that is, the value of the petroleum is linked to that of Venezuelan crude oil.
Taking this into account should now be around $ 60, but the sale price of the petro will still depend on an agreement between those interested in presale and the government. As announced, 100 million petros will be issued, so the total value of the issuance is estimated at about 6,000 million dollars. According to the White Paper, which regulates the operation of the currency, this Tuesday began to sell 38.4 million cryptoactives.
That White Paper indicates at the outset that the offer is fixed, but it is also said that the petro will be able to be mined if the users agree to it. When someone wants to change their petroleum, they will pay the price of the barrel but in bolivars, the Venezuelan national currency, very devalued by the hyperinflation that crosses the country.
The highest denomination ticket, the 100,000 bolivars, is just equivalent to less than $ 0.50 in the parallel exchange market. The change to bolivars will be made in exchange platforms authorized by the government, of which few details are known at the moment.
Its value will lie, above all, according to Laura Rojas, an expert in digital finance, in the promise that a market will be created in Venezuela and "may be used later to pay taxes and public services", she says. to BBC World.
That, coupled with the government's promise that it will endeavor to promote its international use through, for example, the state-owned PDVSA, which will have to pay part of its transactions in Petros.
Is it really a cryptocurrency and how is it different from bitcoin, the most popular one?
Yes, the petro is one of the hundreds of cryptocurrencies that exist and of which bitcoin is the best known. The main difference with bitcoin is that the petro will be centralized by an intermediary, in this case the government of Venezuela, while the bitcoin is completely decentralized. It does not belong to anyone, it is not regulated by governments, banks or investment funds.
Another difference is the mining. Bitcoin can be generated by anyone with the right equipment. The petro, according to the White Paper, that will depend on whether the users agree because initially the supply is 100 million.
The petro is not the first digital currency issued by a centralized entity, such as a company. "From here, established and predetermined rules are followed, which means that neither the value nor the offer are handled discretionally," points Rojas.
What is the government looking for?
The Venezuelan government, with income problems, in the middle of a serious crisis and pressured by the financial sanctions of the United States, launched the petro and promoted it as a solution to be able to finance itself and solve the many evils that plague its economy.
Among the objectives is to create an alternative currency to the dollar and a digital and transparent economy for the benefit of emerging countries and away from the global financial system, controlled from the United States. He wants Venezuela to be "a global reference of sovereignty in front of the big global financial centers".
With the petro, in addition, the government looks for an income that it does not find now. In April, it will have to face new debt payments that it can not refinance due to US sanctions.
Imports from a foreign dependent country have fallen and this is part of the explanation for the lack of food and basic products.
All this in a context of a continuous fall in oil production, almost its only source of dollar inflows, which has not even allowed it to take advantage of the increase in the price of a barrel in recent months.
"The cryptocurrency comes to strengthen our economy," President Maduro said on Monday, without giving further details. * "We will have total success", he ventured. According to the White Paper, 55% of the revenues collected will go to a sovereign fund that the government may use discretionally.
Is it an instrument to issue public debt?
It is the great criticism that the opposition does. The Parliament, controlled by Maduro's rivals, has declared the petro illegal. The economist and opposition deputy of the National Assembly, José Guerra, believes that the petro is not a cryptocurrency and that it resembles more a bond of public debt.
According to Guerra, the creation of the petro is "a debt operation that tries to avoid parliamentary control", he said in a recent television interview. In addition, he referred to it as a "highly risky" investment. "If the government thinks that using petro will get financing that it can not have today, it will be wrong," he added.
The new issuance of debt, in accordance with the Constitution, must be supported by the National Assembly, the legislative chamber of the opposition majority, which refuses to increase the country's enormous debt. And to that is added that the United States prevents the debt from being refinanced or issued new through its territory and its institutions.
Does it serve to circumvent US sanctions?
The idea of the petro is to be able to obtain financing outside the circuits of influence of the United States that both the Executive and the state oil company PDVSA have now closed. However, the Treasury Department has already warned all those interested in investing in petro.
"A currency of this kind would appear to be an extension of credit to the Venezuelan government ... Americans who become involved with the future Venezuelan digital currency may be exposed to US sanctions," he warned.
This could be a deterrent for those who are initially interested in buying petros. The expert Rojas believes that this is the main objective of the Venezuelan government: "Lift the siege of sanctions to get money".
"In the private world, these pre-sales are an innovation with respect to traditional formulas to raise capital, a company that starts or resorts to the sale of shares or issues debt to raise capital when it has a project that is starting", says Rojas.
Issuing cryptocurrency is an alternative. "The government of Venezuela was mounted on that wave", says the expert.
He will be successful ?
The government already affirms that it will have it, but there are still many doubts in the White Paper, still lacking specific key data. President Maduro spoke Tuesday of having registered in the pre-sale a purchase intention worth 735 million dollars in just 20 hours since its launch.
For success, trust will be key.
The government itself is the issuer and the one that promises to buy them back. And it will do so in a context in which several credit agencies have spoken of default (or default) selective for the delay in the payment of interest on some debt bonds.
And in addition, Venezuela will continue to have blocked markets.
This situation could be aggravated by a presidential election on April 22 that a large part of the international community will ignore for not considering that they occur in fair circumstances and that the majority of the opposition will boycott.
"With a cryptocurrency, you do not sell shares or bonds, the investor has no legal right over the project in which he invests, the only thing he has is confidence that he will develop the project according to what has been said," Rojas explains. BBC World.
That is what makes every cryptocurrency a "highly risky" investment. "If, in addition to that, the issuer does not tell you what it is going to do, it is hard for me to think that there are serious investors behind the petro", says Rojas.
In a month the effective sale will begin and, it is expected, begin to dissipate unknowns.