Venezuela’s Petro may do more harm than good, especially for legitimate cryptocurrencies.
Brookings Institute, the old think tank had some interesting remarks to make about the Petro. As published on its website last Friday, Brookings is of the opinion that the Venezuela Petro will not relieve the country of its economic crisis. As if that isn’t enough, they also predicted that it would reduce the integrity of legitimate cryptocurrencies.
The Logic Behind The Conclusion
Brookings’ reasoned that if at the end of the day the Petro turns out to be worthless, it’s aftermath will ultimately contribute to the already circulating idea that cryptocurrencies facilitate fraud in the nation.
The Petro is an efficient way to thwart most international sanctions. Other countries will be propelled to get around blockades using the technology.
“Sanctions will lose their credibility as other countries will feel emboldened to take aggressive actions if the sanctions are thwarted by cryptocurrency sales.”
Last week, the president of Venezuela, Nicolas Maduro said that the country had gotten over $5billion from the Petro in an ongoing pre-sale. He declared that over 186,000 offers for purchasing the currency were on standby.
According to Maduro, most of the pre-sale buyers of Petro are entrepreneurs along with a few individuals from about 127 other countries. However, Brookings Institute insists that the currency is of no real value to the holder.
The lack of service of the Petro is in contrast to legitimate cryptocurrency that provides secure, transparent and decentralized transactions. No thanks to Petro, cryptocurrency will soon face a challenge in Venezuela.
The report continued:
“A concrete line must be drawn to prevent the creation of empty cryptocurrencies that will eventually become a source of illicit debt relief for the nation and disrupt the adoption of legitimate cryptocurrencies.”
Only time will tell if the predictions about Venezuela’s Petro are true.