“Why anyone would pay money to buy a “cryptocurrency” from a country where the existing currency [the bolivar] that the country is managing — which is backed by the country’s full faith and credit, including the largest oil reserves in the world — is devaluing at a rate of 50 percent a month, on top of creating the highest inflation in the world, is a mystery to me,” Russ Dallen, with Caracas Capital, a brokerage, wrote to his clients Wednesday.
In addition, the country’s opposition-controlled congress has declared the Petro illegal and the U.S. Treasury Department has warned American investors that accepting it might violate international sanctions that have been imposed on Venezuela.
Given those hurdles, the Petro is unlikely to produce the kind of revenue that would solve “the government’s dire cash-flow situation,” Eurasia Group, a New York-based consultancy, said in a report. “Likewise, there are few incentives to use the [Petro] as a means of exchange, which means it is unlikely to serve as a credible substitute for the bolivar and therefore help to rein in hyperinflation.”
Even so, Maduro said that in the first 20 hours after the Petro was launched, the government received about $735 million dollars in pre-orders. “We’ve started big,” he said.
Dallen called that claim “dubious.”