By CCN.com: The world is watching complete chaos in Venezuela, which remains in dire financial straits. Crypto investors who steered clear of the Petro offering peddled by the country’s president should be breathing a sigh of relief.
Venezuela’s President Nicolás Maduro is being ousted over the country’s miserable financial situation. Opposition leader Juan Guaidó announced himself as the country’s new leader this week.
Petro Was Meant to Fuel Economy But Never Had any Steam
Under Maduro’s leadership, which has been deemed a dictatorship, the country’s economy suffered immensely. The most staggering figure that sums up how bad the country’s economy has gotten relates to inflation. It’s up a mind-boggling 10 million percent.
Millions of people have packed up and left the country. Those who have stayed must deal with power outages and short supplies of basics like food and medicine.
Maduro said he wanted to help the country’s economy. To help, Maduro proposed the Petro.
To much fanfare, Maduro announced last fall that the Petro was available for sale. Buyers could purchase the token with Bitcoin and Litecoin. The problem was — and continues to be — that there’s little, viable proof that it even exists.
In October, CCN reported that Venezuelans weren’t even buying the Petro. Instead, they were loading up on Bitcoin. For instance, Bitcoin trading volumes in the country hit unprecedented highs. The country became known as being the home of some of the most prolific cryptocurrency traders on earth relative to the country’s population.
Ramming Petro Down Investors’ Throats
Maduro reacted by ordering local banks to accept the Petro and even hinted at charging for exports in it. There were also reports that the government was yanking pensioners’ bolivars from their accounts and replacing them with the state-managed cryptocurrency.
Maduro touted the Petro as a means to help the country right its financial ship. The Petro is backed by the country’s oil reserves, Maduro claimed. Venezuela has the world’s largest oil reserves.
Savvy observers dismissed that reasoning. They believe Maduro pushed for the token as a means to circumvent the U.S. economic sanctions.
CCN reported that the sanctions were debilitating, so Maduro moved to monetize the country’s primary export product to a vast global market of investors without needing the U.S. dollar.
Venezuelan officials claimed funds from investors all over the world would flow into a specific region. That would lead to job creation and breathe new life into Venezuela’s creaking oil export industry.
A Reuter’s investigation debunked that claim.
New Leader Doesn’t Care for Maduro’s Crypto Project
Juan Guaidó, who on Wednesday declared himself acting president of Venezuela, has made his disdain for the Petro clear. He believes it’s a scheme by Maduro to exploit the public.
Take these tweets from Guaidó from 2017.
— Juan Guaidó (@jguaido) December 27, 2017
Maduro dice que el Petro tendrá como respaldo la faja petrolífera, es decir no es una Cripto Moneda, puede ser un bono electrónico con respaldo o cualquier estafa que nadie les creerá. Una Guiso-Moneda en definitiva
— Juan Guaidó (@jguaido) December 27, 2017
Guaidó Gets Support From World Leaders, Except These Guys
U.S. President Donald Trump took to Twitter Wednesday to recognize Guaidó as the interim leader.
The citizens of Venezuela have suffered for too long at the hands of the illegitimate Maduro regime. Today, I have officially recognized the President of the Venezuelan National Assembly, Juan Guaido, as the Interim President of Venezuela. https://t.co/WItWPiG9jK
— Donald J. Trump (@realDonaldTrump) January 23, 2019
Other world leaders who support Guaidó include Canada’s Minister of Foreign Affairs and Foreign Secretary Jeremy Hunt, who tweeted:
My statement on the situation in Venezuela pic.twitter.com/5Tt5jK4Dcm
— Jeremy Hunt (@Jeremy_Hunt) January 24, 2019
The U.K. and several South American nations followed suit.
Maduro has some support from other nations. Mexico, Turkey, China, and Russia have had his back. CCN reported that the Petro was potentially the work of a joint collaboration between Venezuelan and Russian government officials with Putin’s personal approval.
Having Trump’s support is important, notes Clay Porter of Navigant Consulting. Porter heads investigations in the Global Investigations & Compliance practice of the firm.
He told CCN:
I don’t think the opposition leader would want to double down on a mechanism that was meant to circumvent U.S. sanctions. From a political sense, it wouldn’t make any sense [for Guaidó] to embrace [the Petro] if the U.S. government is supporting him.
Protests Plague Beleaguered Nation
Maduro was sworn in for a second term at the beginning of the year. His election was immediately criticized.
Guaidó is pushing for free and fair elections to be held as soon as possible. He’s called on the Venezuelan military to disobey orders from the government. Maduro retains support among military leaders.
Meanwhile, an estimated 26 people died this week in Venezuelan protests.
Nicolas Maduro Image from AP Photo/Ariana Cubillos