Venezuelan Regulators End Petro Token Trading Due to Low Use Case
As Venezuela seeks to become a leading crypto Haven in Southern America, the regulators plan to wind down failed crypto investments. In a January 12 report, the Venezuelan regulators revealed plans to suspend the trading of petro token (PTR), which has been in operation for nearly a decade.
Reportedly, the Petro token was launched during the reign of President Nicolás Maduro to boost Venezuela’s economic stability.
Venezuela Set to Shut Down Operation of Petro
During the launch, former president Maduro anticipated that petro coins would enable investors to maximize their return.
At this time, the US had imposed economic sanctions on Venezuela that undermined the operation of the gas and oil industries. These sanctions aimed to stabilize the Venezuelan economy and address the country’s humanitarian crises.
The restrictive measures imposed by the US in Venezuela forced the Maduro administration to explore practical strategies to bypass the economic sanction. In 2018, Venezuela officially launched the Petro token to offer Venezuelan investors a cheaper and faster method to do business.
Following the launch of the Petro token, the regulatory uncertainties and volatile nature of crypto assets hindered the PTR from attaining its core objectives. The report indicated that due to the ever-evolving nature of the financial sector, Venezuela failed to support the use case of the PTR token.
Demand for BTC Surpasses PTR Token in Venezuela
Besides the change in the financial landscape, the friendly policies imposed by President Maduro captivated the interest of offshore crypto miners to expand to South America. In 2017, the industry leaders anticipated that Venezuela will obtain the first bitcoinization after the investors gained interest in Bitcoin.
The report indicated that despite the biting hyperinflation experienced then, Venezuela investors shifted their focus to Bitcoin investment. The growing demand for Bitcoin in Venezuela undermined the adoption of PTR.
The slow adoption of Petro coin forced Venezuelan officials to explore practical approaches to increase the adoption of oil-backed crypto assets. In 2020, President Maduro led Venezuela’s pro-crypto legislators to promote the adoption of the Petro coin in the Bolivarian Alliance for the Peoples of Our America (ALBA) member countries.
Factors Contributing to Slow Adoption of PTR Token
Despite the intense effort made by the 61-year-old politician to support the use case of Petro, the government declared the oil-backed token illegal. The lack of government support undermined the adoption of Petro in Venezuela.
This forced the regulatory agencies in Venezuela to take the decisive action of suspending the operation of the Petro token. According to the announcement, government officials plan to sunset Petro’s operations on January 15.
The wind-down of the Petro token was shared across various Venezuela-based media outlets. A subsequent report on the Venezuela Patria organization website revealed that winding down PTR trading will be conducted in phases.
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