The Petro Coin is a very exciting project announced by Venezuelan President, Nicolas Maduro. What makes this project interesting is a bunch of firsts, this coin would be the first staterun cryptocurrency and is also backed by physical assets, namely 5 Billion Barrels of Crude Oil, Gold and Diamonds. This is a solid coin and currency in its own respect.
Back in the days when fiat currency was significant, valuable and important, there was the “gold standard” where essentially the amount of currency in circulation and value was a direct reflection of how much gold it was backed by. If executed as promised, the Petro Coin would achieve exactly this as a first in the crypto world.
Why do I think this coin will succeed if executed and implemented as marketed and planned?
Russia, China and Iran. 2/3 (Russia and Iran) are currently sanctioned and China has been threatened with sanctions. Since the Petro Coin was founded as a way to restore wealth, prosperity and escape the sanctions guess who, as an ally of Venezuela and also parties with a vested interest would both profit directly and indirectly from the Petro Coin’s success? I anticipate massive amounts of money would pour in from Russia, China and Iran even if it is discreet and indirect. If I am right I would expect that this coin could be hugely successful and a top coin.
On top of this President Maduro has recently asked allies in the region to get on board with the Petro project.
What are some downside risks?
Judging from social media some are very averse for various political reasons to this coin. Another risk would be that this coin would almost certainly have trouble, be outright prevented, or removed from any Western based exchange. Being listed on major exchanges is a key success because if no one can buy or trade your coin then it’s not going anywhere fast. However, there are enough overseas exchanges to take care of this issue, and I suspect Venezuela would have enough resources to create their own exchanges to solve this issue. *Update Petro Coin’s ecosystem will apparently allow you to exchange and trade in physical assets, cash and other coins so the problem appears to be solved from the outset. However, the boycott and difficulty in trading this coin are potential risks, especially if as I anticipate, some governments would simply just make it a crime for their citizens to hold or trade in this coin. It would be interesting to see where this all heads.
It’s also been reported that Venezuela’s Congress (the opposition) has declared this currency and coin completely illegal. However, it also appears that this has no legal bearing and will not prevent the project from moving ahead.
Should I invest in this coin?
I can’t answer that because only hindsight can clearly show us. I am planning to invest in it as long as the project is executed as marketed and planned. Politics aside I think this could be a win-win for people inside and outside of Venezuela. If this coin helps Venezuela escape sanctions this would almost certainly lead to an improvement for the people of Venezuela since sanctions mainly end up hurting the people (especially the poor).
Apparently Petro has raised nearly 3/4 of a billion USD in their initial private sale. I’m again calling this as a positive sign and I highly suspect numerous state Sponsors from around the world contributed the funds even if indirectly.
In that sense Petro could be an incredibly strong and long-lasting cryptocurrency. The funding behind it is already proof of concept.
On top of that Venezuela seems very serious about making their country a haven for all things crypto. This coin could stabilize their economy and also make them the new “Singapore” of the cryptoworld if they continue to play this right. Despite some negative comments and feedback, this point cannot be denied or overlooked in terms of investment.
It’s been very difficult to find details about this coin, I’ve read various news articles and only recently found the official website. They really need to do more marketing and make a proper URL/domain for this coin and not just a government subdomain. I am certain fraud with this coin has already gone on with so many fake Petro sites that I’ve found which seem to be collecting coins. They should pay particular attention to this as I imagine a lot of people will be calling Petro a scam because of these fake sites.
It also hasn’t been made clear of their plan but from my reading of the official site it appears initially Petro will be sold as an Ethereum token that will then be converted to their own blockchain and wallet once they have completed it.
Another risk is that people like me may begin to lose interest or even forget about it because I was hoping to get in on the private sale.
With that said, I’m not investing in any ICOs for the most part but Petro is one I am interested in for many reasons stated earlier in this post.
Where to find the official website
It took a lot of digging but here is the official Petro Coin website: http://elpetro.gob.ve/index-en.html