The World's First State Sponsored Cryptocurrency is illegal in its own country

This is old news now, but worth emphasising. The Legislature of Venezuela took around half-an-hour to agree to declare the Petro illegal and contrary to Constitutional law. Under the wording of the Venezuelan Constitution, there can only be one legal currency in circulation. So we have the curious case of the worlds first Government Sponsored Asset backed Cryptocurrency being declared illegal within its own country on the day it enters circulation.

Thie curious situation of the Petro is more a result of the complex political situation of Venezuela. Despite having huge reserves of petroleum and other natural resources, gross mismanagement of the economy has led to economic collapse. The entrenched ruling regime having reduced a once flourishing economy to ruin, produced an inflationary rate of 2400%, and collapsed the essential infrastructure. Is know in the process of "renegotiating," that is to say defaulting on its foreign debt.

Despite the fact that in every historical case known of a government printing money ahead of the underlying economic strength of a country resulting in hyperinflation, countries persist in doing it. There is no evidence that the current Venezuelan government has learned from experience. The Petro is supposed to be linked to the price of a barrel of oil, unless the government says otherwise, because the price peg can be changed at will. Oh, and there is no limit to the number of coins produced, and the government can change the mining rate and force a fork at will. In other words the government can do as it pleases. And of course as all the miners are registered, it can also shut down the blockchain any time it wants. Imagine a government with the power to literally turn off the money.