The Demise of Petro Cryptocurrencies: "One Memecoin Issuer Arrested the Issuer of RWA Coin"

Written by: Xiaobing | Deep Tide TechFlow

On January 3, 2026, the U.S. military launched a "massive" attack on Venezuela, and Venezuelan President Maduro was swiftly arrested and transferred.

One commenter remarked, "The one who issued Memecoin was arrested, and the one who issued RWA Token was arrested."

That is indeed the case.

On February 20, 2018, Venezuelan President Maduro announced in a televised address the launch of the world's first sovereign-backed digital currency, the Petro.

At that time, Venezuela was mired in the worst economic crisis in its history, with inflation soaring to nearly 1,000,000% (you read that right), its currency, the bolivar, depreciating like worthless paper, and severe sanctions from the United States only exacerbating the plight of this South American oil giant.

Maduro is pinning his hopes on this cryptocurrency as a last resort to save the country.

However, when the Venezuelan government quietly terminated the operation of the Petro cryptocurrency in early 2024, the world didn't even look at it with much surprise.

This digital symbol, once hailed as the "world's first sovereign cryptocurrency," almost never truly "lived" during its short lifespan. Its demise, like the silent curtain falling on a noisy drama, brought to a close a magical realist story revolving around crypto technology, national sovereignty, and economic collapse.

The fate of the Petro reflects the complete collapse of a country's governance system.

The Petro was born from the ruins.

To understand the Petro, one must first understand Venezuela before its creation.

It was a country ravaged by hyperinflation, where the old currency, the bolivar, evaporated in value hourly, and people's life savings vanished overnight. Meanwhile, severe financial sanctions from the United States, like an invisible noose, tightened Venezuela's economic lifeline, effectively isolating it from the global financial system.

It was on this economic wasteland that the Petro was born, carrying an almost impossible mission of "saving the country".

Its blueprint is grand and enticing.

First, the Petro cryptocurrency bypasses the US dollar-dominated international financial system through blockchain, opening up a completely new financing and payment channel; second, it claims that each Petro coin is linked to a barrel of real oil reserves, with 100 million Petro coins having a total value of US$60 billion.

In August 2018, Venezuela officially established the Petro as its second official currency, circulating alongside the already riddled Bolivar.

The Maduro government's promotion of the Petro cryptocurrency is unprecedented in its scale.

Retirees' pensions have been switched to the Petro cryptocurrency, and civil servants and military personnel have also received their Christmas bonuses in this digital currency. Maduro even airdropped 0.5 Petro coins as Christmas gifts to retirees nationwide via live television broadcast at the end of 2019.

In addition to its forced promotion within the country, Venezuela is also trying to attract more countries to use the Petro cryptocurrency.

Time magazine reported that the Petro cryptocurrency received personal approval from Putin, and Russia sent two advisors to participate in the project design. Russia pledged to invest in the Petro and consider using this digital currency for settlement in bilateral trade, in order to jointly counter the dollar's hegemony.

Venezuela is also attempting to extend its Petro cryptocurrency to OPEC member countries, hoping to create a de-dollarized oil trading system. Oil Minister Quevedo publicly stated, "The Petro will become a settlement method accepted by all OPEC member countries."

To make the Petro more widely available, the Maduro government has transformed itself into a cryptocurrency project team, establishing a complete infrastructure, providing detailed purchase tutorials on its official website, developing four ecosystem apps, and authorizing six exchanges, including Cave Blockchain and Bancar, to publicly sell the Petro.

But reality quickly dealt a heavy blow to the Maduro government.

Public indifference and skepticism

The Venezuelan government's enthusiastic promotion efforts have been met with widespread public indifference.

The most upvoted comment under Maduro's Facebook post announcing the issuance of the Petro cryptocurrency reads: "Unbelievable that anyone would approve of this utterly terrible government... They are ruining the whole country." Another popular comment says: "The government has become accustomed to letting every stupid thing fail and then blaming other countries."

Venezuelan journalist Gonzalo's comment on Twitter was even more scathing: "The Petro is an anesthetic for this failed nation."

The disastrous user experience further exacerbated public distrust. Registration for the Petro cryptocurrency was extremely rigorous, requiring the uploading of both sides of an ID card, a detailed address, and a phone number, but applications were frequently rejected inexplicably. Even when registration was successful, the "Motherland Wallet" system was plagued with problems and often unusable.

Even worse was the payment experience. Many merchants reported Petro payment failures, forcing the government to acknowledge system flaws and provide compensation.

A Venezuelan woman said, "We don't feel the presence of the Petro here."

Externally, the US government also launched a targeted attack on the Petro cryptocurrency.

In March 2018, just one month after the launch of the Petro cryptocurrency, Trump signed an executive order completely prohibiting U.S. citizens from buying, holding, or trading the Petro. The Treasury Department stated explicitly that any transaction involving the Petro would be considered a violation of sanctions against Venezuela.

The scope of sanctions expanded rapidly. In 2019, the United States added Moscow-based Evrofinance Mosnarbank to its sanctions list, citing the bank's role in financing the Petro cryptocurrency. The U.S. Treasury Department bluntly stated that "the Petro was a failed project that attempted to help Venezuela evade U.S. economic sanctions."

Aircoin disguised as oil

The most fatal problem with the Petro is that it is untenable both technically and economically.

The essence of true cryptocurrency lies in the trust that comes with decentralization. Petro, however, is a centralized database completely controlled by the government.

For an ordinary Venezuelan, this means that the value of the Petro in his digital wallet is not determined by the market, but can be arbitrarily changed by a decree issued by the president.

The Venezuelan government claims that each Petro cryptocurrency is backed by one barrel of oil from the town of Atapirire in the Ayacucho region, with reserves estimated at 5.3 billion barrels. However, a Reuters reporter's on-site investigation revealed dilapidated roads, rusted oil well equipment, and overgrown weeds throughout the area, showing no signs of large-scale oil extraction.

While in exile, former Venezuelan Oil Minister Rafael Ramírez estimated that extracting the government's promised 5.3 billion barrels of oil would require an investment of at least $20 billion, a pipe dream for a Venezuelan government that imports even basic food items.

Ramirez bluntly stated: "The Petro was set at an arbitrary value; it only exists in the government's imagination."

Even more absurdly, the Venezuelan government later quietly modified the assets backing the Petro cryptocurrency, changing it from 100% oil backing to a mix of oil, gold, iron, and diamonds backing it in a ratio of 50%, 20%, 20%, and 10%, respectively.

This practice of arbitrarily modifying "white papers" is considered a bad practice even in the cryptocurrency world.

The technical issues are equally serious. Petro claims to be based on blockchain technology, but the data displayed by its block explorer is extremely anomalous. The white paper states that Petro should generate a block every minute, like Dash, but the actual block interval is 15 minutes, and on-chain transaction records are almost zero.

Unlike the price fluctuations of truly decentralized cryptocurrencies like Bitcoin, the price of the Petro is entirely controlled by the government. The exchange rate was initially set at 1 Petro to 3600 Bolivars, then arbitrarily adjusted to 6000, and later to 9000.

Although the government announced the official price of the Petro at $60, on the black market in the capital Caracas, people can only exchange it for goods worth less than $10 or US dollars in cash if they are lucky enough to find someone willing to accept it.

Petro is essentially a control tool disguised as a blockchain.

The final blow: internal corruption

If the life of the Petro was slowly fading away, then the final straw that broke the camel's back was a shocking internal corruption scandal.

On March 20, 2023, a political earthquake struck Venezuela.

Tareck El Aissami, a key member of Maduro's government and Minister of Oil, suddenly announced his resignation.

A few days ago, Venezuelan anti-corruption police arrested his right-hand man, Joselit Ramírez Camacho, head of SUNACRIP, the national digital currency regulator and the core department responsible for the regulation and operation of the Petro cryptocurrency.

As the investigation deepened, a massive fraud involving billions of dollars came to light.

Attorney General Tarek William Saab revealed that some senior government officials used cryptocurrency regulators to operate in parallel with oil companies, signing oil loading contracts "without any administrative control or guarantee." The corresponding payments after the oil sales were not made to the national oil company, but were transferred to private pockets through cryptocurrencies.

Investigations revealed that the corruption network involved between $3 billion and $20 billion, with the ill-gotten gains used to purchase real estate, digital currencies, and cryptocurrency mining farms.

In April 2024, Oil Minister Aisami was arrested and faced multiple charges, including treason, money laundering, and criminal syndicate involvement. More than 54 people were indicted for allegedly participating in the corruption scheme.

This corruption scandal dealt a devastating blow to Venezuela's cryptocurrency industry. SUNACRIP was forced to suspend operations, and the government subsequently launched a nationwide anti-mining campaign, confiscating more than 11,000 ASIC miners and disconnecting all cryptocurrency mining farms from the national power grid.

By 2024, the government had halted trading of the Petro, ordered a nationwide shutdown of cryptocurrency mining, and closed all authorized cryptocurrency exchanges. An industry once heavily promoted by the government collapsed completely under the impact of corruption scandals.

The Petro experiment failed completely, not because of Washington's ban, but because of its own decay.

A tool designed to combat external sanctions has ultimately become a tool for laundering money for corrupt officials.

A microcosm of national failure

The failure of the Petro cryptocurrency almost mirrors the failures of Venezuela's national governance.

It's a "treat the symptom, not the cause" policy. Faced with deep-seated economic structural problems, the government chooses to create a glamorous facade, attempting to use numerical illusions to cover up the real economic decay. It's like facing a building tilting due to a collapsing foundation, while the managers are painting the exterior a bright coat of paint.

The Maduro government's attempt to solve systemic problems through technology is fundamentally flawed. The value of digital currency still rests on the credit of the issuing entity. In a country with inflation in the millions and basic necessities unavailable, what credibility can the government possibly have? If the public doesn't even trust traditional government-issued currency, how can they possibly accept a completely new concept like digital currency?

The Petro cryptocurrency, on the contrary, has completely exhausted the last remaining traces of government credibility.

Imagine this scenario: a retired teacher, whose life savings have been eroded by inflation, is now forced to exchange her monthly pension for Petro cryptocurrency. She walks from store to store with her phone, only to be met with the same answer: "We don't accept this," or "The system is down."

The root of Venezuela's economic problems lies in fundamental flaws in its economic structure. Venezuela suffers from a classic case of "Dutch disease," with over-reliance on oil exports leading to the decline of its manufacturing sector and an extremely singular economic structure. When oil prices fall, the entire national economy collapses. The Petro cryptocurrency, which attempts to anchor itself to oil, has only exacerbated the economy's dependence on oil, failing to address the structural problems.

In practice, the Venezuelan government lacked the basic technical and operational capabilities to implement blockchain projects, resulting in numerous flaws from the outset. From abnormal block data and payment system malfunctions to the arbitrariness of the pricing mechanism, every detail exposed the incompetence of the hastily assembled team, even falling short of the capabilities of a Shenzhen outsourcing studio.

Today, the Petro has completely disappeared into the dustbin of history, Maduro's "experiment to save the country" ended in a disastrous failure, Venezuela remains mired in its problems, and its people continue to suffer from the raging fire of inflation.

The real way out for this country clearly does not lie in finding the next "petro"-like digital shortcut, but in whether it can muster the courage to face reality, return to common sense, and initiate the real change that should have been done long ago but has been incredibly difficult.