Just as is the story with any other tale regarding the regulations of cryptocurrencies and commodity-based digital assets, there are a lot of twists and turns and very few concrete answers. This is most certainly the case when it comes to the most recent regulatory news that has been released regarding Venezuela’s oil-backed digital coin, El Petro. Earlier this week it was announced that Venezuela’s National Constituent Assembly had approved a draft of a piece of legislation stating that the use of crypto assets would now be completely legal for the citizens of the financially struggling South American country. This came as a shock, however, to many individuals both in and outside of the country, as back in January of this year, the National Assembly (not Constituent), passed legislation making El Petro illegal.
So what does this new legislation mean exactly? Well, in order to understand that, you must first understand just what the difference is between the National Assembly and the National Constituent Assembly in Venezuela. The National Assembly is the long-standing legislative branch of the Venezuelan government. It is made up of members of the current government as well as individuals from opposition parties. The Constituent Assembly is a new political body that was created in 2017 under a decree from President Nicolás Maduro. Although the details are less than clear on just how the people that make up the Constituent Assembly were brought into the fold, most news outlets have reported that the voting system used highly favoured those that are not in opposition with Maduro and his policies. The Constituent Assembly does not have official standing to make laws, but with the backing of Maduro, it holds enough power to push through legislation of its own that will be enforced by the current government.
With that knowledge in mind, your interest in the oil-backed El Petro should be met with a certain degree of caution. While the adoption of any new digital coin requires, at the very least, a modicum of due diligence on the part of the investor, El Petro may require a little bit more. More than just investigating the availability, the use, and the exchange market for this coin, when investing in El Petro, the state of the government in Venezuela must be considered as well. If the current government is removed and the Constituent Assembly stripped of its power, the legislation first put forth by the National Assembly may once again reign supreme. This reinstatement may very well halt the use of El Petro and make the currency worthless.
Regardless of just how easily the tides could turn on the current Venezuelan government and the value of El Petro, President Maduro does not appear to be slowing in his use and promotion of the coin. The president claims that he has already raised $5 billion dollars by selling El Petro and that the use of the coin has allowed the government to purchase thirty new, and much needed, ambulances.
Even if with this most recent news you have an interest in purchasing El Petro for your own cryptocurrency portfolio, you can visit the official El Petro Website and get all of the information you need. The website is presented in Spanish, but Google Translate can walk anyone through the basics in English. If you have any questions about just what it means to own an oil backed digital coin like El Petro, please visit our guide, What is a Commodity Backed Cryptocurrency?