The Petro trading ecosystem. Source: NTerminal Venezuela’s Petro, also known as Petromoneda, is an allegedly oil-backed CBDC introduced in 2018. Although by the Maduro government, Petro by Venezuelan citizens. actively pushed has not been actively used Most of it was being immediately . Despite the lack of adoption, the Venezuelan government managed to put together one of the most advanced CBDC projects, making Venezuela one of the first countries to introduce a CBDC legislation and a fully functioning blockchain ecosystem. sold for US dollars or exchanged for goods and services Russia’s involvement in development of a technical base for Petro allowed for a quick rollout of a sophisticated instrument used by Venezuela to circumvent US sanctions. Venezuela has been able to take a move-fast-and-break-things approach due to their lack of a functioning traditional financial system. Leveraging preexisting public cryptocurrency projects from other countries has saved them time and effort in issuing tokens and making them available at a number of trading venues. It has enabled Venezuela and Russia—who was in developing Venezuela’s CBDC—to quickly iterate on their prototypes and identify its shortcomings. heavily involved Russian officials have regular reports from Venezuelan delegations and many Russian business leaders admitted to paying close attention to these experiments as well as to using Venezuela as a testing sandbox. received In one of his , President Maduro talked about the ‘revival’ of Petro, hoping to expand its use as a means of payment to circumvent US sanctions. U.S.government has to confine the proliferation of Petro beyond local markets, but the use of existing blockchain technologies and the help of Russian companies allowed Venezuelan governments to create . annual speeches taken proactive steps overseas fiat on-ramps On February 24, 2021, Maduro that there is ongoing work on creating a digital bolivar that, unlike Petro, could possibly become a legal tender. publicly announced The announcement came after Maduro to digitize the Venezuelan economy earlier in 2021. Jose Angel Alvarez, President of Venezuela’s National Cryptocurrency Association, that digital bolivar could complement Petro, since Petro could be used for domestic transactions whereas digital bolivar for international ones. stated his intention argued Legislation Entities involved in creating and maintaining Venezuela CBDC infrastructure. Source: NTerminal The was one of the first decrees to establish legal grounds for Petro and give the President full control over it. Constituent Decree on Crypto Assets and the Sovereign Cryptocurrency PETRO The main regulatory authority for virtual assets in the country is the (SUNACRIP), established in 2019. The official from January 30, 2019 provided the for the crypto industry in the country. National Superintendence of Cryptocurrencies decree legal framework It gave SUNACRIP the power to in Venezuela. It also regulates the operation of virtual asset exchange agencies. These decrees also ensure the creation of “ ” which are special economic zones where Venezuela intends to promote the use of Petro by granting tax benefits. regulate the creation, issuance, organization, operation, and use of virtual assets PETRO Zones President Maduro’s government has introduced multiple policies to increase Petro adoption. In 2020, Maduro establishing the mandatory use of Petro as a payment method for fuel sold to airlines by the state-owned oil company PDVSA. He also that Petro will be accepted when paying for government services. issued a decree declared Issuance According to its , Petro is a sovereign cryptocurrency issued by the Bolivarian Republic of Venezuela. It claims to be backed by oil, gold, iron, and diamond resources. 51% of the issuance goes into reserve (funds for stabilizing the price and maintaining the system) and the remaining 49%  is available for sale. The total emission is 100,000,000 PTR. whitepaper Custody The (Crypto Assets Treasury) is in charge of the custody, collection, and distribution of virtual assets. It is also responsible for fund administration, management of virtual assets and instruments to hold its value, and digitally monitoring compliance with virtual contracts. Tesorería de Criptoactivos Distribution The distribution of Petro is coordinated by the . In October 2018, Venezuela launched an ICO and a . The country has also done to distribute the currency and increase its adoption. It has even from bolivar to Petro. SUNACRIP public sale of Petro multiple airdrops converted pension funds Technology Petro launch on February 20, 2018. From left to right: Vice President Tareck El Aissami, Denis Druzhkov, President Nicolás Maduro, Fedor Bogorodsky The launch of Petro has been . The underlying blockchain technology for Petro (NEM) has been developed by the Russian businessman and his company, Aero Trading. heavily tied to Russia Fedor Bogorodsky Another man behind the Petro technology was Denis Druzhkov, former CEO of Zeus Exchange, a Singapore-based hybrid cryptocurrency exchange operating on traditional financial and digital markets. There were multiple inconsistencies in protocol specifications in the Petro whitepaper. For example, Venezualan architects they originally recorded Petro in from Ethereum to New Economy Movement (NEM); the designers several important aspects of the GitHub repository of Dash for their own whitepaper; and were mentioned in the Spanish and English versions of their whitepaper. ‘switched’ the blockchain plagiarized two different blockchains As early as 2020, Petro project achieved a fully functioning blockchain ecosystem with a , a , an , a , and a . wallet payment system exchange crypto remittance platform Block Explorer Although never mentioned in the context of Petro, the Venezuelan government actively the launch of a regulated decentralized crypto exchange, BDVE. supported Built on the Ethereum blockchain, the exchange enables investors to trade traditional stocks and assets in their digital, tokenized form. Decentralized exchanges (DEX) like BDVE allow for the creation of peer-to-peer markets directly on the blockchain. Traders independently store and use funds, and make transactions directly with one another, without any involvement from the exchange itself. This exchange can serve as the centerpiece component for the proliferation of Petro beyond Venezuela and a handful of its allies. The BDVE exchange is part of a rebranded Pi ecosystem. PiMarkets, PiToken, PiExchange, PiMoney, PiCasino, and PiChain are all decentralized cryptocurrency tools. Its developers, Guillermo Pérez Alba, Manuel Fajardo García, Johan Sosa Salazar, and Carlos García Navarro, worked on other projects for Maduro. Such projects include the Interbanex Foreign Exchange, which offered its users the opportunity to trade foreign currency through private banks. Entities involved in BDVE exchange and PiMarkets app infrastructure. Source: NTerminal The BDVE application PiMarkets—which says it “connects the user with the Decentralized System of Encrypted Markets”—is already available on Google Play. On October 20, 2020, according to a posted in the PiCrypto Telegram group, they rolled out the beta version of the PiMarkets app in the Apple App Store. As of February 15, 2021, the app is still in beta. document Usage Petro does not have a full legal tender status in Venezuela. This means that it is not required by law to be accepted as a means of payment. The Bolivar remains the only official currency recognized as payment for any monetary debt. However, Petro can be used to pay for taxes, goods, and services. To increase its adoption, the government rolled out . The Venezuelan government used Petro to distribute social welfare, but most of the users opted for immediately swapping it for more liquid assets using local exchange services and peer-to-peer platforms like LocalBitcoins. Petro ATMs VES-BTC Trading Volume on LocalBitcoins. Source: NTerminal Trading Venues Petro can be bought on the primary market through the Crypto Assets Treasury with bolivars, international currencies, or other cryptocurrencies. It can also be purchased or traded on the secondary market via the state-run peer-to-peer (VEX), which is accessible through the app. Venezuela Exchange PetroWallet

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