In light of recent events, which were shrouded in the Venezuelan cryptocurrency El Petro, Bits.media decided to find out what they think about the possibilities backed by oil money in cryptosuite.
The Chairman of the Expert Council on digital economy and blockchain at the State Duma of the Russian Federation Artem Koltsov believes that El Petro will not be able to bring Venezuela out of the crisis:
“I first heard about Peter in the beginning of the year and, of course, this was a subject of HYIP. I was just commenting on the situation for RBC. Then the people was expecting breakthrough results from all cryptocurrency. But, unfortunately, after nearly a year of Petro did not help in the fight against crisis in Venezuela. Top stock exchange immediately denied the listing Venezuelan cryptocurrency, putting one of the reasons it bypass the U.S. sanctions. Yes, Venezuela has attracted attention, but it is not a panacea and is not a way out of the crisis. I think that to defeat the US sanctions using cryptocurrency impossible.”
Partner, Director of product development Zichain Taras Chumachenko ‘m sure the lack of confidence in the government of Venezuela is one of the biggest problems:
“The problems in the economy of Venezuela have been going on for several years and are compounded by the financial embargo from the EU and the USA. Trying to cover the budget deficit by printing new money, the government hyped the inflationary spiral of prices in the country by the end of 2018, could grow by 1 000 000%, as the IMF predicts.
From the point of view of economic theory the first step to combat hyperinflation is to stop the uncontrolled printing of money. State cryptocurrency El Petro is part of the complex of measures on stabilization of economy — its issue is limited to the hashing algorithm. Additionally, Venezuela promises to provide cryptocurrency reserves of oil, gold and other state assets. As planned, this could significantly improve public confidence in national currency and partly to solve the economic problems of the country. In fact, El Petro is far from ideal — in large technical whitepaper noticeable similarities with cryptocurrency Dash, which has already gained popularity among citizens as a way to escape from hyperinflation. The difference for Peter is that you enter a state regulator SUNACRIP that can make changes to the algorithm of consensus and, perhaps in the blockchain El Petro. This fact undermines the trust of the population, which will continue to prefer dollars or truly decentralized cryptocurrency (e.g., Bitcoin or Dash), the state of digital money.
The introduction of Petro in the settlement system may allow Venezuela to technically circumvent US sanctions. Now, the sanctions prohibit us citizens and located in the United States entities conducting transactions in El Petro and transactions with debt instruments of the government of Venezuela. For violation of the sanctions regime, States may impose fines and block the dollar calculations of the banks that carried out illegal transactions. If the Venezuelan government will seek listing of its cryptocurrency on the largest cryptocurrency market and provide liquidity trades, the counterparties will be able to freely buy El Petro and pay her with the Venezuelan companies or the government. The US technically won’t be able to block transactions. The only thing they can do is fine the exchange and to block their dollar accounts. But many of the major cryptocurrency exchanges not working with Fiat, so the penalties the United States they did not hurt. A key factor in the widespread distribution calculations in Petro is the trust of partners who want it to pay. The actions of the state not currently allow you to gain the necessary trust, so the odds of El Petro to function remain elusive.”
Petro is not credible, as in the work on cryptocurrency made a lot of mistakes, complemented by an incorrect presentation of the project by the government. Probably holding a public round of sales, which is scheduled for November 5, 2018 will be a decisive question about the future development of the cryptocurrency.