The Rise and Fall of the Petro: A Microcosm of Venezuela’s Failure

On January 3, 2026, the US military launched a large-scale strike on Venezuela, resulting in the swift arrest and transfer of President Nicolás Maduro.

One commentator remarked, “The issuer of a Memecoin has arrested the issuer of an RWA Token.”

That is, in fact, the reality.

On February 20, 2018, Venezuelan President Nicolás Maduro announced on live television the launch of the world’s first sovereign-backed digital currency, the Petro.

At that time, Venezuela was in the grip of its worst economic crisis on record. Inflation had soared to nearly 1,000,000% (you read that right), and the national currency—the bolívar—had become virtually worthless. Severe US sanctions only deepened the crisis for this oil-rich South American nation.

Maduro hoped this digital currency would be the last lifeline to save the country.

However, when the Venezuelan government quietly shut down the Petro in early 2024, the world barely blinked.

This digital symbol, once hailed as the world’s first sovereign cryptocurrency, never truly came to life during its brief existence. Its end was a silent curtain fall on a dramatic tale of cryptography, national sovereignty, and economic collapse—a story steeped in magical realism.

The Petro’s fate reflected the complete breakdown of Venezuela’s governance system.

From the Ruins: The Birth of the Petro

To understand the Petro, you must first understand Venezuela before its launch.

This was a nation scorched by hyperinflation. The bolívar’s value evaporated by the hour, and citizens’ life savings disappeared overnight. At the same time, harsh US financial sanctions tightened an invisible noose around Venezuela’s economy, isolating it from the global financial system.

It was in this economic wasteland that the Petro emerged, carrying an almost impossible nation-saving mission.

Its blueprint was grand and alluring.

First, the Petro aimed to bypass the US dollar–dominated international financial system using blockchain technology, creating a new channel for fundraising and payments. Second, it claimed that each Petro was backed by a barrel of real oil reserves—100 million Petros in total, valued at $6 billion.

In August 2018, Venezuela officially designated the Petro as its second official currency, circulating alongside the already battered bolívar.

The Maduro administration promoted the Petro with unprecedented force.

Pensions for retirees were paid in Petro, and Christmas bonuses for civil servants and military personnel were also converted to this digital currency. At the end of 2019, Maduro even airdropped 0.5 Petros as Christmas gifts to retirees nationwide during a live TV broadcast.

Beyond aggressive domestic promotion, Venezuela also tried to persuade more countries to adopt the Petro.

Time magazine reported that the Petro received personal approval from Vladimir Putin, with Russia sending two advisors to help design the project. Russia promised to invest in the Petro and considered using it for bilateral trade settlements in an effort to jointly counter US dollar dominance.

Venezuela also sought to promote the Petro among OPEC member states, hoping to build a de-dollarized oil trading system. Oil Minister Quevedo publicly stated, “The Petro will become a settlement tool accepted by all OPEC members.”

To drive wider adoption, the Maduro government acted as a crypto project operator—building out infrastructure, providing detailed purchasing guides on its official website, developing four ecosystem apps, and authorizing six exchanges—including Cave Blockchain and Bancar—to publicly sell the Petro.

But reality quickly delivered a harsh blow to Maduro’s government.

Public Indifference and Doubt

The Venezuelan government’s fervent promotion met with collective indifference from the public.

Under Maduro’s Facebook post announcing the Petro, the most-liked comment read: “Unbelievable that anyone supports this utterly terrible government… They are destroying the whole country.” Another popular comment said: “The government is used to every stupid thing ending in failure, then blaming other countries.”

Venezuelan journalist Gonzalo was even more direct on Twitter: “The Petro is an anesthetic for this failed nation.”

Terrible user experience further eroded public trust. The Petro’s registration process was extremely strict, requiring uploads of both sides of an ID card, detailed address, phone number, and more—yet applications were often inexplicably rejected. Even those who managed to register found that the “Fatherland Wallet” system was frequently unusable.

Payment experience was even worse. Many merchants reported failed Petro payments, forcing the government to admit system flaws and offer compensation.

One Venezuelan woman said, “Here, we don’t feel the Petro exists at all.”

Externally, the US government also targeted the Petro with precision.

In March 2018, just one month after the Petro’s launch, President Trump signed an executive order fully prohibiting US citizens from purchasing, holding, or trading the Petro. The Treasury Department stated that any transaction involving the Petro would be considered a violation of sanctions against Venezuela.

The scope of sanctions expanded rapidly. In 2019, the US added Moscow-based Evrofinance Mosnarbank to its sanctions list for providing financing services to the Petro. The Treasury bluntly stated, “The Petro is a failed project trying to help Venezuela evade US economic sanctions.”

An “Air Coin” Disguised as Oil

The Petro’s most fatal flaw was its lack of technical and economic foundations.

The core of true cryptocurrencies is the trust that comes from decentralization. The Petro, however, was a fully centralized database controlled by the government.

For ordinary Venezuelans, this meant the value of the Petro in their digital wallets was not determined by the market, but could be changed at will by presidential decree.

The Venezuelan government claimed each Petro was backed by a barrel of oil from Atapirire in the Ayacucho region, with reserves of 5.3 billion barrels. But Reuters reporters found broken roads, rusted oil equipment, and overgrown weeds—no signs of large-scale oil extraction.

In exile, former Oil Minister Rafael Ramírez estimated that extracting the promised 5.3 billion barrels would require at least $2 billion in investment—an impossible sum for a government that needed to import basic food.

Ramírez bluntly stated, “The Petro is set at an arbitrary value; it exists only in the government’s imagination.”

Even more absurdly, the Venezuelan government later quietly changed the Petro’s backing from 100% oil to a mix of oil, gold, iron, and diamonds in a 50%, 20%, 20%, 10% ratio.

Such arbitrary changes to the white paper are notorious even within the crypto industry.

The technical issues were just as severe. The Petro claimed to be based on blockchain technology, but its block explorer showed highly abnormal data. The white paper stated the Petro should generate one block per minute like Dash, but in reality, the interval was 15 minutes, and there were almost no on-chain transactions.

Unlike truly decentralized cryptocurrencies like Bitcoin, whose prices fluctuate with the market, the Petro’s price was entirely controlled by the government. The exchange rate shifted arbitrarily from 1 Petro = 3,600 bolívars to 6,000, and later to 9,000.

Although the government announced an official price of $60 per Petro, on the black market in Caracas, people could only exchange it for goods or US dollars worth less than $10—if they could even find someone willing to accept it.

In essence, the Petro was a control tool disguised as a blockchain project.

The Final Blow: Internal Corruption

If the Petro’s life was slowly fading, the final straw was a massive internal corruption scandal.

On March 20, 2023, Venezuela’s political scene was rocked by a seismic event.

Tareck El Aissami, a core member of Maduro’s government and Oil Minister, suddenly announced his resignation.

Days earlier, anti-corruption police had arrested his right-hand man, Joselit Ramírez Camacho, head of the national cryptocurrency regulator SUNACRIP—the agency responsible for overseeing and operating the Petro.

As the investigation deepened, a multibillion-dollar fraud scheme was uncovered.

Attorney General Tarek William Saab revealed that some senior officials exploited the parallel operations of the cryptocurrency regulator and oil companies to sign “contracts without any administrative oversight or guarantees” for oil shipments. Proceeds from oil sales were not paid to the national oil company but were instead transferred to private accounts via cryptocurrency.

The investigation found that this corruption network involved between $3 billion and $20 billion, with the illicit funds used to purchase real estate, digital currencies, and cryptocurrency mining farms.

In April 2024, Oil Minister El Aissami was arrested on charges including treason, money laundering, and criminal conspiracy. More than 54 people were prosecuted for involvement in the scheme.

This corruption scandal dealt a devastating blow to Venezuela’s cryptocurrency industry. SUNACRIP was forced to suspend operations, the government launched a nationwide anti-mining campaign, seized over 11,000 ASIC miners, and disconnected all cryptocurrency mining farms from the national grid.

By 2024, the government had halted Petro trading, ordered a nationwide stop to cryptocurrency mining, and closed all authorized crypto exchanges. An industry once heavily promoted by the government collapsed completely under the weight of corruption.

The Petro experiment ended in total failure—not because of Washington’s sanctions, but because of its own rot.

A tool designed to resist external sanctions ultimately became a vehicle for corrupt officials to launder money.

A Microcosm of National Failure

The Petro’s trajectory of failure almost perfectly mirrored Venezuela’s failed governance logic.

It was a classic “band-aid on a bullet wound” policy. Facing deep economic structural issues, the government chose to create a flashy gimmick, attempting to mask real economic decay with digital illusion. It was like painting the facade of a building while its foundation crumbled.

The Maduro government tried to solve institutional problems with technology—a fundamentally flawed approach. The value of a digital currency still depends on the issuer’s credibility. In a country with million-percent inflation and a shortage of basic necessities, what credibility does the government have? If the public doesn’t trust traditional government-issued currency, how could they accept a new digital currency?

The Petro only further depleted the last remnants of public trust in the government.

Imagine this: a retired teacher, her life savings destroyed by inflation, now receives her monthly pension forcibly converted to Petro. She walks from store to store with her phone, only to hear, “We don’t accept that,” or “The system is down.”

The root of Venezuela’s economic woes lies in its fundamentally flawed structure. The country suffers from classic “Dutch disease”—overreliance on oil exports led to a decimated manufacturing sector and an extremely narrow economy. When oil prices fall, the entire economy collapses. The Petro tried to anchor itself to oil, but this only deepened dependence on oil without addressing structural issues.

In practice, the Venezuelan government lacked the basic technical and operational capacity to implement a blockchain project. The initiative was riddled with flaws from the beginning. From abnormal block data to payment system failures and arbitrary pricing mechanisms, every detail revealed amateurish execution—often worse than a low-cost outsourcing shop.

Today, the Petro has disappeared into the dust of history. Maduro’s “nation-saving experiment” ended in defeat. Venezuela remains mired in crisis, and its people continue to suffer in the fires of inflation.

The country’s real solution clearly does not lie in seeking the next “Petro-style” digital shortcut, but in having the courage to face reality, return to common sense, and begin the genuine, though arduous, reforms that are long overdue.

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