Venezuelan cryptocurrency petro is more likely to harm “legitimate” cryptocurrencies such as Bitcoin, instead of curing the country’s economy, the Brookings Institute stated in an analysis. The think thank asserts that speculators will quickly find that petro has no long term value, despite the fact it managed to raise money in pre-sale.
“Rather than avoid centralized control over the market, the petro is subject to arbitrary discount factor adjustment, fluctuating oil prices, and a corrupt government known for manipulating its currency,” the article reads, adding that there is “a very real danger that the petro will not only fail to cure Venezuela’s economic woes but will also weaken the integrity of cryptocurrencies writ-large.”
Petro is a cryptocurrency developed by Venezuelan government and is backed by the country’s oil. President Nicolas Maduro (pictured center) stated in February that the pre-sale of the cryptocurrency brought in $735 million in the first day.