Venezuelan President Maduro once issued the "Petro" cryptocurrency to counter U.S. sanctions?

Few countries’ stories in the long corridor of modern financial history are as dramatic as Venezuela’s, intertwining a national economic collapse, geopolitical despair, and the wild potential of cryptocurrency. At the core of the story is a cornered president—Nicolás Maduro—and his earth-shattering yet ultimately ridiculed national financial experiment: “Petro.” This is not only a case of a failed cryptocurrency but also a mirror reflecting state incapacity, people’s self-rescue, and the double-edged nature of digital assets.

Born from Despair

To understand the birth of Petro, one must first look back to Venezuela in late 2017. At that time, the country was in the midst of a doomsday-level economic catastrophe. The fiat currency, the “strong bolívar,” had become virtually worthless, with inflation soaring into the millions. People needed burlap sacks of money to shop, and merchants, tired of counting, would weigh the bills to determine their value.

More deadly were the severe US sanctions, which acted like an invisible iron curtain, completely isolating Venezuela from the global US dollar financial system (SWIFT). This meant that the country, with the world’s largest proven oil reserves, could neither export oil to earn foreign exchange nor seek aid from international banks. Maduro’s government was like a gold hoarder on the brink of starvation—traditional financial channels were completely blocked.

In this desperate situation, Maduro turned his eyes to the blockchain craze sweeping the globe. A seemingly “genius” idea emerged: since the US dollar system wouldn’t let us play, let’s create our own digital currency to bypass it! Thus, in February 2018, the world’s first sovereign-backed cryptocurrency claiming to be backed by real assets—Petro—was officially pre-sold amid a flurry of hype and skepticism.

A Glamorous Lie

According to the grand narrative from official sources, each Petro was backed by a barrel of crude oil from Venezuela’s Orinoco heavy oil belt, initially priced at about $60. It sounded perfect: a “stablecoin” backed by both national credit and tangible assets, seemingly the holy grail of crypto dreams. However, when tech communities and financial experts peeled back its glamorous veneer, they found it was hollow, full of lies and contradictions.

Technical Flip-Flops: Petro’s technological foundation was extremely unstable. Initially claimed to be based on Ethereum, it soon switched to NEM, and eventually became a private chain controlled by Maduro’s government. This constant back-and-forth shattered developer trust from the start.

Centralized Under the Blockchain Cloak: The biggest irony of Petro was that it claimed to be “decentralized” but was entirely centralized. It couldn’t be traded on mainstream crypto exchanges and only circulated on government-approved platforms. Its issuance, pricing, and rule modifications were all controlled by Maduro’s regime. It was not truly cryptocurrency but a “government digital token” disguised under blockchain.

Unfulfillable Oil Backing: The most fatal flaw was that the so-called “oil backing” was merely a slogan. People holding Petro could never exchange it for a barrel of real crude oil. When assets can’t be verified or redeemed, it becomes just a worthless promissory note.

Facing market indifference, Maduro’s government resorted to forced promotion: issuing passports, collecting taxes, and distributing civil servant pensions—all mandatorily using Petro. But this top-down coercion failed spectacularly. Citizens, having long lost faith in the government, refused to accept this “air coin,” and in March 2018, the US signed an executive order banning US citizens and entities from transacting Petro, cutting off any international liquidity.

As the official Petro project was dying, another cryptocurrency was stubbornly growing among the Venezuelan people—becoming the real “people’s currency.” That was the US dollar-pegged stablecoin—Tether (USDT).

When fiat failed and official digital currency was another scam, the Venezuelan people made their choice through widespread adoption. They began using USDT for daily transactions, creating a unique “crypto dollarization” phenomenon. On the streets of Caracas, vendors displayed USDT payment QR codes (often on low-fee Tron addresses), and people paid with mobile wallets to buy bread, medicine, and gasoline. For them, volatile Bitcoin was a long-term store of value—“digital gold”—while USDT was a lifeline for daily survival and fighting inflation.

Ironically, while Maduro’s government, citing “stabilizing the power grid,” militarized and shut down all civilian crypto mining farms in 2024, considering mining a crime, its state oil company PDVSA, to bypass US sanctions, mandated that foreign buyers settle export contracts in USDT. This created an absurd scene: the government suppressed civilian crypto activities while at the national level deeply embracing on-chain US dollars, engaging in larger-scale asset transfers.

The Final Curtain

The failure of Petro and the corruption scandal at PDVSA (with $20 billion in oil revenues embezzled through crypto channels) did not end Venezuela’s entanglement with cryptocurrencies. Instead, a more astonishing legend emerged: over the years, Maduro’s regime may have secretly accumulated up to $60 billion in Bitcoin reserves through a complex “shadow financial network.”

According to media reports citing intelligence sources, since 2018, Venezuela has been exporting gold to Turkey, the UAE, and other countries, converting the proceeds into cryptocurrencies via OTC channels when Bitcoin prices were low, and storing them in multi-signature protected cold wallets. These private keys are believed to be held by multiple trustees across different jurisdictions, with the core orchestrator reportedly being an individual known as the “architect” of the system—Alex Saab. This massive digital wealth has become Maduro’s ultimate trump card against sanctions.

However, this cat-and-mouse game reached a dramatic climax on January 3, 2026. The US military launched a raid, successfully arresting Maduro and his wife in Caracas. Just hours before the operation was publicly revealed, a mysterious bet appeared on the blockchain prediction platform Polymarket, precisely predicting Maduro’s downfall, turning a $32,500 wager into over $400,000 in profit, strongly hinting at insider information leaks.

With Maduro’s fall, the fate of that legendary $60 billion Bitcoin reserve became Washington’s most pressing financial mystery. Who holds the private keys to unlock this wealth? Can the US recover it through legal and intelligence means? This geopolitical crypto game has only just entered its climax.

Looking back at the farcical Petro, it leaves the world with a profound lesson: technology can never replace trust. When a government’s credit is bankrupt, no fancy financial tool can save its currency. Yet, Venezuela’s story also reveals another side of cryptocurrency: when state machinery fails, it can become the last refuge for ordinary people to protect assets and sustain livelihoods. From the national scam of Petro, to the民间自救 of USDT, and the shadow reserves of Bitcoin, Venezuela’s experience is undoubtedly one of the most profound—and brutal—financial lessons of the 21st century digital age.