When Venezuela launched the Petro digital currency, the nation hailed it as a great way to circumvent crippling US sanctions. Many saw it as a government that has embraced modern technology. However, the government seems to have gotten a new tool to control its citizens.
The Petro is Not Bitcoin
The Petro goes against everything that the BTC whitepaper supports. One crypto expert well versed with the issue talked about the Fatherland Card, which is a document used in the nation to determine who will receive subsidies from the state.
The government uses this subsidy system to impose Orwellian control over the citizens. For instance, the government will use it to decide who is deserving of subsidies as well as tracking citizens. In November, Venezuela announced that it would offer 0.5 Petro to all pensioners as a bonus for Christmas. The Petro has a completely different agenda than Bitcoin. When we take a look at Bitcoin, we quickly see it’s controlled by no single entity. When assessing the Petro, you realize that it’s centrally controlled by the government, which is essentially trying to control it’s citizens with it.
According to an expert familiar with the matter, only a few companies in the nation can process payments using the Petro. Even then, the government forces them to accept the Petro at a fixed rate of 2.5 million VES per Petro. However, it is common knowledge that you can buy the Petro at one million VES.
This has led to a disturbing situation where people buy the Petro on the open market and then purchase goods at stores for over 100% how much it cost to acquire the Petro. The result is that companies are selling their goods for less than 50% of what they would get for the Petro on the open market. As a result, many stores are closing down due to the huge losses they incur. Currently, corrupt government officials that sell the Petro to the market are making a killing. Besides that, there has been a lot of money laundering activities involving the Petro.
How it will Pan Out
One person familiar with the matter created a very nice thread on Twitter to explain the issue. Right now, no one seems interested in buying the Petro. Most people purchase the Petro want to spend it, which will likely drive up the prices. With goods being sold at 50% of what they are worth, many people are lining up to get the Petro.
While the government is using the Petro to gain more control over its citizens, many of its citizens are turning to Bitcoin to cope with the economic crisis. BTC offers numerous advantages that the Petro does not have. A recent report showed that more people than ever are buying Bitcoin in Argentina and Venezuela. By checking figures provided by CoinDance, you can tell that people expect the nation to experience some kind of economic instability soon.
The government’s use of the Petro to spy on its citizens highlights why cryptocurrencies such as Bitcoin are so important. They ensure that authoritarian regimes no longer have control over your financial freedom while also ensuring that you are protected from any economic crisis caused by their actions.
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