Venezuelan cryptocurrency Petro as an element of monetary policy

Abstract

The article presents the reasons that pushed the government of Venezuela to create the first state-owned cryptocurrency Petro, as well as the context of its introduction and principals of functioning. Unlike other cryptocurrencies Petro is an asset backed by the country’s natural reserves. The author offers to consider it as a token that allows transactions with real money and gives an investor a right to exchange it into the national currency according to Venezuela’s oil quotations. Due to its ICO (initial coin offering) the government managed to attract significant financial resources. Petro already functions as a national payment system and is traded at 8 local exchanges. Although not all aims set by the government have been achieved, the cryptocurrency strengthened the monetary system during the economic crisis and helped to alleviate the influence of American sanctions. In the future it is possible that Petro will be more fully integrated into the country’s financial system or will be rejected as a temporary mechanism. The article’s methodology is based on such general scientific methods as analysis, synthesis, comparison as well as on specific ones: calculation of economic indicators, graphic method and content analysis.