Petro's Demise Chronicles: Venezuela's Failed Epitome

Original Title: "The Rise and Fall of Petro, Venezuela's Emblem of Failure"

Original Source: DeepTech TechFlow

On January 3, 2026, the US military launched a "massive" strike against Venezuela, swiftly arresting and removing Venezuelan President Maduro.

Someone commented, "One who issued a Memecoin arrested the one who issued an href="/spot/RVN-USDT">RWA Token."

Indeed, that's what happened.

On February 20, 2018, Venezuelan President Maduro announced the issuance of the world's first sovereign-backed digital currency, the Petro.

At that time, Venezuela was in the midst of its worst economic crisis in history, with inflation soaring to nearly 1,000,000% (you read that right), the national currency, the Bolivar, rapidly losing its value, and US sanctions further crippling this South American oil-rich nation.

Maduro hoped that this digital currency would be the country's last straw for salvation.

However, in early 2024, when the Venezuelan government quietly terminated the operation of the Petro, the world hardly blinked an eye in surprise.

This symbol, once hailed as the "world's first sovereign cryptocurrency," barely had a moment of true existence in its short life. Its demise, like the silent closing act of a noisy drama, put an end to a magical realism story revolving around cryptocurrency, national sovereignty, and economic collapse.

The fate of the Petro reflects a complete collapse of a country's governance system.

Amidst the Ruins, Petro Was Born

To understand the Petro, one must first understand Venezuela before its birth.

It was a nation ravaged by hyperinflation, where the value of the old currency, the Bolivar, evaporated by the hour, and people's lifelong savings vanished overnight. Meanwhile, harsh US financial sanctions acted like an invisible noose, tightening around Venezuela's economic lifeline, almost isolating it from the global financial system.

It was upon this economic ruin that the Petro emerged, carrying an almost impossible "savior" mission.

Its blueprint was grand and enticing.

Firstly, the Petro aimed to bypass the dollar-dominated international financial system through blockchain, opening up a new financing and payment channel. Secondly, it claimed that each Petro was backed by a barrel of real oil reserves, with 100 million Petros totaling $60 billion in value.

In August 2018, Venezuela officially established the Petro as its second official currency, circulating alongside the already beleaguered Bolívar.

The Maduro government's promotion of the Petro was unprecedented.

Retirees' pensions were converted to Petro, and public servants and military personnel received their Christmas bonuses in this digital currency. Maduro even, in a live TV broadcast at the end of 2019, "airdropped" 0.5 Petros to all national retirees as a Christmas gift.

In addition to domestic mandatory promotion, Venezuela also sought to attract more countries to use the Petro.

Time magazine once revealed that Putin personally approved the Petro, and Russia sent two advisors to participate in the project design. Russia pledged to invest in the Petro and considered using this digital currency for bilateral trade settlements to jointly challenge the dominance of the US dollar.

Venezuela also tried to promote the Petro to member countries of the Organization of the Petroleum Exporting Countries (OPEC), hoping to create a de-dollarized oil trading system. The Oil Minister, Quevedo, publicly stated: "The Petro will become the settlement method accepted by all OPEC member countries."

To encourage more people to use the Petro, the Maduro government transformed into a crypto project team, established a complete infrastructure, provided detailed purchase tutorials on the official website, and even developed four ecosystem apps, authorizing six exchanges including Cave Blockchain and Bancar to openly sell the Petro.

However, reality soon dealt a heavy blow to the Maduro government.

Public Apathy and Doubt

The fervent promotion by the Venezuelan government met with collective public apathy.

Under Maduro's announcement of the Petro on Facebook, the most liked comment read: "It's unbelievable that some people still agree with this extremely terrible government... They are destroying the entire country." Another popular comment said: "The government is used to turning every stupid idea into a failure and then blaming it on other countries."

Venezuelan journalist, Gonzalo, had an even sharper assessment on Twitter: "The Petro is the opiate of this failed country."

The user experience disaster further exacerbated the public's distrust. Petro's registration verification is extremely strict, requiring the upload of ID card fronts and backs, detailed address, phone number, and other information, but applications are often inexplicably rejected. Even if registration is successful, the "Homeland Wallet" system faces frequent issues, often rendering it unusable.

Even worse is the payment experience. Many merchants reported issues with Petro payments failing, leading the government to acknowledge system flaws and provide compensation.

A Venezuelan woman expressed: "Here, we don't feel the presence of the Petro."

Externally, the U.S. government also took precise aim at the Petro.

In March 2018, just one month after the Petro's launch, Trump signed an executive order, outright banning U.S. citizens from buying, holding, or trading the Petro. The Treasury Department explicitly stated in a release that any Petro-related transactions would be considered a violation of sanctions against Venezuela.

The scope of sanctions quickly expanded. In 2019, the U.S. added Moscow-based Evrofinance Mosnarbank to the sanctions list, citing the bank's financing services to the Petro. The U.S. Treasury Department bluntly stated, "The Petro is a failed project, attempting to help Venezuela evade U.S. economic sanctions."

Aircoin in Petro Clothing

The Petro's most fatal flaw is that it is untenable both technically and economically.

A true cryptocurrency's essence lies in the trust brought by decentralization. The Petro, however, is a centralized database fully controlled by the government.

For an average Venezuelan, this means that the value of the Petro in their digital wallet is not determined by the market but can arbitrarily change with a presidential decree.

The Venezuelan government claims that each Petro is backed by a barrel of oil, sourced from the Atapirire town in the Ayacucho region, with reserves of 5.3 billion barrels. However, Reuters journalists who visited the area found dilapidated roads, rusty oil equipment, overgrown vegetation, showing no signs of large-scale oil extraction.

In exile, former Venezuelan Oil Minister Rafael Ramirez estimated that to extract the promised 5.3 billion barrels of oil, at least $20 billion in investment would be needed, a far-fetched idea for the Venezuelan government, which even struggles to import basic food.

Ramirez bluntly pointed out: "The Petro was set at an arbitrary value, existing only in the government's imagination."

Making it more ludicrous, the Venezuelan government later quietly modified the Petro's backing assets, shifting from 100% oil backing to a mix of oil, gold, iron, and diamond with a 50%, 20%, 20%, 10% ratio.

This kind of arbitrary modification of a "whitepaper" is considered highly unethical, even within the cryptocurrency community.

The technical issues are equally severe. The Petro claims to be based on blockchain technology, but its blockchain explorer displays highly unusual data. The whitepaper states that the Petro should generate a block every minute like Dash, but the actual block time is 15 minutes, and on-chain transaction records are nearly nonexistent.

Unlike true decentralized cryptocurrencies like Bitcoin, the Petro's price is entirely controlled by the government. The exchange rate started at 1 Petro to 3600 Bolívares, was arbitrarily adjusted to 6000, and later to 9000.

Although the government declared the official price of the Petro to be $60, in the black market in the capital, Caracas, people can only exchange it for goods worth less than $10 or US dollars in cash, if they are lucky enough to find someone willing to accept it.

The Petro is essentially a control tool disguised in blockchain clothing.

The Final Blow: Internal Corruption

If the Petro's life has been slowly withering away, the final nail in its coffin was a groundbreaking internal corruption scandal.

On March 20, 2023, Venezuela's political arena was rocked by an "earthquake."

A core member of the Maduro government, Minister of Petroleum Tareck El Aissami, suddenly resigned.

A few days prior, Venezuela's anti-corruption police had arrested his right-hand man, Joselit Ramírez Camacho, head of the National Cryptocurrency Regulatory Authority, SUNACRIP, the key department responsible for Petro's regulation and operations.

As the investigation deepened, a multibillion-dollar scandal emerged.

Attorney General Tarek William Saab revealed that some high-ranking government officials used the cryptocurrency regulatory body to operate parallel to the oil company, signing oil loading contracts "without any administrative control or guarantee." The proceeds from oil sales were not paid to the national oil company but instead transferred to private pockets via cryptocurrency.

The investigation revealed that this corrupt network involved an amount between $30 billion and $200 billion, with the embezzled funds being used to purchase real estate, cryptocurrencies, and cryptocurrency mining farms.

In April 2024, Minister of Petroleum Aissami was arrested, facing charges including treason, money laundering, and involvement in a criminal organization, with over 54 individuals being prosecuted for their alleged participation in this corruption scheme.

This corruption scandal dealt a devastating blow to Venezuela's cryptocurrency industry. SUNACRIP was forced to cease operations, leading the government to launch a nationwide anti-mining campaign, confiscating over 11,000 ASIC mining machines and disconnecting all cryptocurrency mining farms from the national grid.

By 2024, the government had halted the Petro's transactions, mandated a nationwide cessation of cryptocurrency mining, and shuttered all authorized cryptocurrency exchanges. An industry once heavily promoted by the government crumbled under the impact of the corruption scandal.

The Petro experiment was a complete failure, not due to Washington's embargo, but due to its own corruption.

A tool intended to counter external sanctions ultimately became a money laundering tool for corrupt officials.

An Emblem of National Failure

The Petro's trajectory of failure almost mirrored Venezuela's logic of governance failure.

It was a "kick-the-can-down-the-road" policy. Confronted with deep-rooted economic structural issues, the government chose to create a flashy gimmick, attempting to use digital illusions to mask real economic decay. It's like facing a leaning building due to foundation collapse, yet the managers are just painting a beautiful coat on the exterior walls.

The Maduro government tried to solve systemic issues through technological means, which was a flawed approach in itself. The value foundation of a digital currency still relies on the issuer's credibility. In a country with hyperinflation in the millions and basic necessities unmet, how could the government have any credibility? If the population doesn't even trust the traditional currency issued by the government, how could they possibly accept a brand-new digital currency concept?

Instead, the Petro further depleted the last remnants of government credibility.

Imagine this scene: a retired teacher whose life savings have been eroded by inflation, and now her monthly pension has been forcibly converted into Petros. She holds her phone, walking into shop after shop, only to hear "We don't accept this" or "The system is down" every time.

The root cause of Venezuela's economic issues lies in the fundamental flaws of its economic structure. Venezuela has fallen victim to the classic "Resource Curse," excessively relying on oil exports leading to a decline in manufacturing and an overly monolithic economic structure. When oil prices fall, the entire national economy crumbles. The Petro attempted to anchor to oil, exacerbating the country's reliance on oil without addressing the structural issues.

In practice, the Venezuelan government lacked the basic technical and operational capabilities to implement a blockchain project, leading to a project riddled with issues from the start. From blockchain data anomalies to payment system failures, and the arbitrary nature of the price mechanism, every detail exposed the incompetence, even worse than a Shenzhen outsourcing studio.

Today, the oil-backed cryptocurrency has completely disappeared into the dust of history, Maduro's "rescue experiment" ended in a tragic failure, and Venezuela remains deeply mired, with the population continuing to suffer in the flames of inflation.

The true way out for this country evidently does not lie in searching for the next "oil-backed coin" type of digital shortcut but in whether it can muster the courage to face reality, return to common sense, and embark on the long-overdue yet incredibly difficult real transformation.

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