According to reports, the government of Venezuela could be winding down the operations of the petro cryptocurrency. The decision comes after Sunacrip, the Venezuelan cryptocurrency watchdog, was set back by the alleged participation of its former head Joselit Ramirez in a potential $20 billion corruption scheme involving the settlement of Venezuelan oil sales.

Reports Indicate Venezuela Is Prepared to Liquidate Petro Cryptocurrency

The run of the first nation-issued cryptocurrency asset might be close to its end. According to reports from Bloomberg Linea, three people linked to Sunacrip, the Venezuelan crypto watchdog, have stated that the institution has decided to liquidate the petro five years after its issuance.

The decision, allegedly taken by the new restructuring board in charge of Sunacrip, would also include liquidating the debts contracted with big petro holders in the country, including department stores that decided to accept petros as a payment method.

Petro’s price in the market had already plunged before the information was released, while the government-defined price still stretches to $60. The cryptocurrency was used as a unit of account to set the prices for issuing national documents like passports and for taxes and fines. However, it is still unknown if Sunacrip will use the government-set value for these payments and liquidations.

End of an Era

Putting down Petro’s operations would close an era in which the Venezuelan government promoted its use to sidestep the sanctions that the Obama and the Trump administrations enacted against important state-owned companies like PDVSA, the state-owned oil company.

Venezuelan economist Aaron Olmos explained that eliminating the Petro would set a bad precedent. He stated:

The disappearance of the Petro would mean dismantling something that was part of the 2018 economic proposal … this historical idea of a currency backed by oil … ended up deriving into something that the government could not control because it was linked to the same inefficient public management.

The end of the Venezuelan petro would be a significant part of the negotiations of the Biden administration with Nicolas Maduro’s administration. The currency was never used to make international settlements after it was banned from being purchased by U.S. citizens by President Trump in 2018, even when it was initially considered to be used for that purpose.

The liquidation of the petro would also be part of the government’s cleanup of Sunacrip after its former head Joselit Ramirez was arrested on charges of corruption involving sales of Venezuelan oil that never reached the nation’s coffers.

In May, the Petro blockchain faced operational problems and stopped several times. At the time, there were reports of hundreds of wallets blocked.

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