Venezuelan Petro Reportedly on the Brink of Liquidation

According to local sources, one of the first state-backed cryptocurrency assets, the Venezuelan Petro, would be facing an imminent liquidation. Asonacrip, a national cryptocurrency association, reported having information about the upcoming liquidation process, including the automatic exchange of the Petro balance to bolivares, the Venezuelan fiat currency.

Venezuelan Petro to Be Liquidated

The life of the Venezuelan petro, one of the first state-backed cryptocurrencies, might be ending soon. According to reports from Asonacrip, a Venezuelan cryptocurrency group, the government would be preparing to liquidate all the petros in circulation, automatically exchanging them for bolivares, the Venezuelan fiat currency.

The information coincides with the liquidation of other crypto assets held by users in government-managed accounts, which will also be converted to Venezuelan bolivares on January 15.

There have not been official communications on the future of the cryptocurrency asset since Sunacrip, the cryptocurrency watchdog, was restructured due to the alleged involvement of its former head, Joselit Ramirez, in a multi-billion corruption scheme related to the sale of crude by the institution.

In May, the Petro blockchain faced operational problems and stopped several times, blocking hundreds of wallets from making transactions.

However, lately, the petro had been used more as a unit of account for certain state-related payments than as a payment cryptocurrency. The value of the Petro was established at $60, the price of a Venezuelan barrel or crude by January 2018.

This is not the first time that sources appear to signal the end of the cryptocurrency. In June, three sources linked to Sunacrip reported that liquidating the petro was an already taken decision by the Venezuelan government and that the institution was negotiating payments with the largest Petro holders.

The cryptocurrency was at the top of its popularity in 2019 when President Nicolas Maduro airdropped half a petro to the country’s citizens and paid pensioners Christmas bonuses with the cryptocurrency asset.

To follow all the latest developments in crypto and the economy in Latin America, sign up for our Latam newsletter below.

What do you think about the possible liquidation of the Venezuelan petro? Tell us in the comments section below.