I recently spoke with Quartz about Venezuela’s efforts to get more cash out of their cryptocurrency scheme. Given that the Petro is priced at a barrel of oil but theoretically based on completely undeveloped reserves, with PDVSA’s production collapsing to historic levels and a long line of creditors with stronger claims – this seems like a perfectly good way to throw away money.
“The current roadshow by the Venezuelan government to offer discounts on the petro to energy-importing states such as India represents a clearly desperate, last-ditch effort to prop up a failing regime through a pyramid scheme, and no one is taking the bait,” Robert Amsterdam, an international lawyer who has been advising mining and energy corporations, told Quartz.
“Petro is a way for the Venezuelan government to skirt US sanctions and offer a temporary mechanism for a handful of people to move dollars out of the country without having to risk it on the Bolivar, which hit 454% inflation in the first quarter. However in order for this limited series of transactions to work, they need to continue bringing in new punters for the money to exit,” added Amsterdam, explaining the rational behind the offer.