Strength and Sovereignty
VEN102a*, 2018, 5 VES

Slot Comment:

Bolivares Soberanos (Sovereign Bolivar) Replacement Note

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Note Details

  

Set Details
Note Description: 5 Bolívares 2018 - Printer: CMV
Grade: 66 EPQ
Country: Venezuela
Note Number: VEN102a*
Signatures/
Vignettes: 		- Wmk: S. Bolívar & BCV
Certification #: 8077102-071
Owner: Revenant
Set Category: World
Set Name: Strength and Sovereignty
Slot Name: VEN102a*, 2018, 5 VES
Research: Currently not available

Owner's Description

This note is a replacement note or a "star" note.

The Petro: The Venezuelan Crypto Currency Fraud!

A Venezuelan national digital currency - called the “Petro” - was announced in December 2017 and launched in March 2018. It was to be a digital commodity-backed currency. So, the Petro actually “launched” before the Bolivar Soberano did, in June 2018. The idea had originally been put forward much earlier by Hugo Chavez, before his death, some 5 years before the launch of the Petro. It was launched to supplement the BsF - which everyone knew by that point was going the way of the dodo, the original bolivar, and the Zimbabwean dollar - and “help overcome US sanctions.

Each Petro was backed by a barrel of oil and sold at the same price - because that poor, run-down oil extraction industry was once again looked to for saving the government’s finances, because it seems at this point that oil reserves are about the only thing Venezuela has going for it - which may itself be problematic in a world with increasing pressure to move away from gasoline and towards EVs and renewable fuels.

Instead of being “mined” like bitcoin, Petros were “pre-mined” - meaning created and controlled by the Venezuelan government, and they could be bought with other currencies and cryptocurrencies - but not with Venezuelan Bolivares! At least, not in initial offerings.

The opposition control National Assembly at the time called it illegal. In the US, the Trump administration immediately called it a “scam” and issued an executive order barring any US-based financial transactions using the Petro. So, if you never heard about any of this, that may be part of the reason why. Another reason might be that it was never released and, therefore, never traded. Though "reservations" were sold by the Venezuelan government to obtain Petros, no Petros had been released by the Venezuelan government as of late 2018.

Reuters investigated the Petro six months after its initial coin offering (ICO) - after the Bolivar Soberano released. When visiting the Venezuelan Ministry of Finance headquarters in Caracas, the Superintendent of Cryptocurrencies did not have an office there and their promoted website did not exist. The Atapirire parish, where President Maduro specifically decreed the Petro's value would be linked to oil reserves in the area, has seen no petroleum-related activities and the oil rigs in the area appeared small, old, and abandoned. Experts stated that it was impossible to link the Petro to the Bolívar Soberano because no one knows its legitimate value.

It would seem - so far anyway, as of mid-2021 - that all of those pre-sales / reservations were just an act of fraud, that the government of Venezuela just took people’s money and didn’t deliver, and the Trump administration pretty much had it exactly right in calling it a scam. I am wondering if it was always supposed to be a scam or if they just abandoned it when they could not figure out how to make it work and then went in favor of the Soberano instead. The “design” of the currency, the algorithm it was based on and the white paper documenting how it would work kept changing - even after they did their pre-sales.

On Feb 21, 2018, while they were working on launching the Petro, Venezuela also announced the “Petro Gold” - a gold-backed currency. It was not clear if the backing was going to be actual gold reserves or a claim on mineral resources - gold in the ground, yet to be mined. But it seems like the Petro failed to actually “launch” and, when that happened, this idea does not seem to have gone anywhere.

And so, there you have it - the story of one of the world’s first national digital / “crypto” currencies - dead on arrival / before arrival. I wonder if this is a bad sign for future national digital currencies or just a bad sign for Venezuela and their future experiments with this concept - because they do not seem to be done with it.

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