The Petro is one of the most controversial cryptocurrencies in existence, as it was created simply to circumvent economic sanctions. It is allegedly pegged to the price of one Venezuelan barrel of oil, but its white paper shows no method for how this works. As hyperinflation in Venezuela climbs to new all-time highs, the country is desperately looking for ways to escape a total economic collapse. Nicolas Maduro – President of Venezuela – has already used the Petro to build homes for the homeless, and is now planning to use it as a national currency.
The Beginning of a Cryptocurrency Society
In a TV announcement to the public, El Presidente said that the government is going to create a new salary and pricing system all pegged to the value of the Petro. Maduro said that this will help raise the wages of workers and will lead to a substantial improvement in life quality and therefore economic quality. This will come into effect on Monday, August 20th along with a new fiat currency – the Sovereign Bolivar. Venezuela is going to be the first nation to introduce a cryptocurrency as one of its recognized national currencies.
Bitcoin Still on the Rise
Thanks to ultra-low electricity rates, more Venezuelans than ever before are beginning to mine Bitcoin. Meanwhile, over in America and Canada electrical companies are charging crypto miners hefty fees for electricity, and some municipalities in Washington state are pausing power applications for fear the electrical grid can’t cope with the rising demand. Due to the lower power costs in Venezuela, this means more citizens are able to get their hands on Bitcoin and are using it to buy goods and services on the internet.
Economic Sanctions Creating Chaos
Interestingly, Venezuela isn’t the only country going through times of hardship, with its citizens turning to crypto for a way out. Iran, Turkey, and Nigeria are all turning to crypto for a way out of devaluing fiat currencies. The Japanese Yen used to be where people turned, but now with the rise of crypto and its acceptance on the web, it provides a myriad of opportunities that the Yen cannot offer.
Is This Part of America’s Plan?
The US has imposed economic sanctions on a handful of countries, and as their economies swirl around the drain, the governments seek to create their own cryptocurrency to escape the inevitable hyperinflation. If you dig below the surface of cryptocurrencies – especially those using the SHA-256 algorithm – there could be a case that the US actually wants these nations to turn to cryptos. The NSA created the SHA-256 algorithm and it’s used by many of the most popular cryptos – including Bitcoin. The DEA has already said that it can trace all crypto transactions – even those made with “private” coins such as Monero. This means that crypto could provide a way for the all-seeing eye of the NSA to keep tabs on nations such as Venezuela and Iran.
The Petro will be added to Venezuela’s list of accepted currencies – along with the new Sovereign Bolivar – on Monday. This could open the door to more cryptos being accepted in the future and if it manages to help curb hyperinflation, we could see other nations beginning to adopt cryptos as legal tender.