Venezuela’s El Petro cryptocurrency continues to make waves after a highly successful pre-sale which generated $735 million in less than 24 hours. But while President Nicolas Maduro has welcomed El Petro as a means to take on the “superman” that is the US Dollar, his US-backed opposition who themselves know a thing or two about the power of the Dollar have moved to stop El Petro in its tracks. According to “opposition” representative Rafael Guzman, El Petro violates the Venezuelan constitution, even though the constitution was drafted before the existence of cryptocurrencies.
El Petro serves as a blockchain version of Venezuelan oil exchange-traded funds (ETFs) that can be bought, sold and otherwise traded in the open market place just like any other ETFs. There is no reason to believe that El Petro is any different in a legal sense, than the purchase of shares in any other commodity that a country is happy to sell on the open market. When one buys El Petro, one is buying a percentage of an barrel of oil (or many depending on how many Petros one buys). Thus, if Venezuela selling oil is perfectly legal, selling it through blockchain technology via a digital currency unit, El Petro, is also perfectly legal.
It is somewhat ironic that this enterprising initiative is being opposed by the ultra-capitalist opposition,. However, because of the potential of El Petro to revolutionise the way oil is traded, while democratising access to a vital market, it is no wonder that the old guard are frightening of a more progressive and democratic market model.
In a counter-intuitive way, this outcry from the US-backed opposition is actually a substantial endorsement of the new oil backed cryptocurrency. The neo-liberal Venezuelan opposition have incredibly close ties to the US State Department and US intelligence agencies. Frequently, statements coming from the Venezuelan opposition are simply translations of policy documents form Washington. If the US feels so threatened by El Petro that it has taken to giving its puppets in Caracas an anti-Petro script to read, this means that the world’s first ‘black-gold’ cryptocurrency must be making an impact, even though it is still only available through special pre-sales on the official El Petro website. When one looks at the potential of El Petro, one can see why the US and its political proxies might be frightened of the revolutionary aspects of the new crypto.
While El Petro’s pre-sales have been boosted by the fact that in often volatile cryptocurrency markets, a digital coin backed by the hard commodity of oil is a clear stabilising factor, the excitement surrounding El Petro goes beyond the fact that it has managed to combine the exciting world of cryptocurrencies with the more predicable commodities markets.
Traditionally, investment in the energy industry is typically the terrain of major investment firms or sovereign wealth funds, while individual investors or small conglomerates of investors can rarely get onto the oil ladder in any meaningful way. El Petro looks to change this, by offering a share in Venezuela’s vast oil reserves to individual small and medium sized investors from throughout the world and all at the push of a button.
El Petro is in this sense, not only a mobile investment, but could easily become a form of ordinary exchange that is more pervasive than older cryptocurrencies such as Bitcoin. In a world where oil is ‘good as gold’, having an oil backed currency could end up being a far more stable means of exchange for ordinary items than existing fiat currencies backed by increasingly unstable central banking systems.
Thus, when Venezuelan President Nicolas Maduro said,
“El Petro is the future of Venezuela and the world. This cryptocurrency is linked to the future of economy, production and finances in the region”,
Maduro was in fact speaking from a position not only of confidence, but from a position of a literal revolutionary whose progressive Bolivarian politics could ironically influence the global system of financial capitalism, by democratising the commodities market and bringing it directly to ordinary people, as never before.
While the US is trying to do anything it can to retard the progress of El Petro into wider global markets, it will be difficult for the wider world to say no to an easy to use currency that is backed on a solid and tangible commodity. Venezuela has already opened an international cryptocurrency training centre in Caracas that like all education and vocational training in the country, is free for all students.
While many on the ‘right-wing’ of the finance industry have written off Venezuela’s economic prospects due to its socialist government, in reality, by investing into cryptocurrencies, one is actually seeing a progressive hybrid model of individual entrepreneurialism combined with central investment in a nationalised oil industry, whose proceeds are invested back into public projects and national infrastructure.
This win-win model could prove not only history making, but also money making both for Venezuela and those in the wider world who embrace El Petro in the early stages of its availability. The new reality is that a country that many cynics have written off after suffering under US sanctions has found a way to not just resuscitate its economy, but create a new economic model for investors and consumers, all while retaining the essence of its Bolivarian socialist model.
With a future like this, it is no wonder that the US puppet opposition want Venezuela to remain chained to the Dollar model of the past.