Venezuela’s Oil Backed State Cryptocurrency Doomed

Venezuela

My Oh My! Venezuela has jumped into the newest crypto-currency technology (a token offering) by issuing an oil backed digital asset token which needs old inefficient technology to get oil out of the ground. So, to be precise, you can get a NEW token backed by oil which can’t get out of the ground because of OLD broken technology. What could go wrong? Well, for one thing, you will lose your money. All I can say is ARE YOU KIDDING? A “bankrupt” country attempts to save itself by doing an ICO backed by oil that is extremely difficult to get out of the ground and doing the offering in the Marshall Islands (bet you don’t even know where that is). Oh yeah, and its banned in the US too (sanctions). OK, if that’s something of interest, I am offering a digital asset token backed by the Golden Gate Bridge, another by Yellowstone National Park and more to come. Call me?
(Bill Taylor/Managing Editor)


“IT “WILL be an instrument for Venezuela’s economic stability and financial independence”, promises a white paper published by the country’s government last month. Venezuela, the issuer of the world’s least stable currency, proposes to issue its most trustworthy in the form of the petro, a “sovereign crypto asset backed by oil”. A private sale of this promising new asset started in February. The government plans to offer it to the public on March 20th.

In one sense, the idea is as ludicrous as it sounds. Only the most credulous investors will trust a currency issued by Venezuela’s socialist regime, which has debased the bolívar, expropriated private enterprises, ridden roughshod over the country’s constitution and faces sanctions from the United States and the European Union.

But there is a germ of sense in what Venezuela is proposing. The country is suffering from hyperinflation, with prices doubling every month. By the end of 2018 economic output will be 40% lower than it was in 2013, according to the IMF. Venezuela needs the “economic stability” promised by the white paper. In theory, adoption of a crypto-currency, impervious to political whims, could provide that…”


Source: Economist.com