Venezuela is advertising its groundbreaking state-sponsored cryptocurrency as a means to “promote well-being, bringing power closer to the people.” A lofty goal, but it’s hard to see how the troubled nation’s citizens will be empowered if they can’t even buy it.
The website through which a so-called pre-sale of the Petro digital token began Tuesday is only taking U.S. dollars and euros, and rival coins Bitcoin and Ether. The offering ends March 19. President Nicolas Maduro says the cryptocurrency will be backed by Venezuela’s oil reserves.
Venezuela forbids its citizens from buying foreign currency. The restrictions mean that not accepting bolivars in the Petro pre-sale effectively shuts out residents in the country. The sale is a last-ditch attempt to raise funds since sanctions stemming from Venezuela’s debt default hamper the nation’s ability to issue traditional securities.
Twitter users swung between annoyed and amused after finding they couldn’t buy their own country’s cryptocurrency. User @JanethMcc said “I only have my currency, the bolivar, and I can’t access the Petro. I demand an explanation as a Venezuelan.”
Venezuelans will be able to buy Petros with bolivars in the secondary market, which, like Bitcoin trading in peer-to-peer online exchanges, will probably trade in line with the black market rate. Owning cryptocurrencies is attractive in inflation-ridden countries with currency controls like Venezuela as they provide a way to protect savings.
The bolivar trades at about 200,000 per dollar in the black market, or about seven times higher than the official rate, as the hyperinflation rate spirals into the thousands…