The President of Venezuela, Maduro, has announced that Petro tokens will be distributed to the regions of the country.
During a live TV broadcast on Venezolana de Televisión (VTV), the President said:
“I am allocating to all states, in this case governorates and protectorates, […] one million Petro twice a month, from November.
[…] This means in concrete terms that we are allocating from 1.354 million euros to 3.249 million euros to governorates and protectorates.”
Venezuela is divided into 23 regions, called federal states, plus the District of the capital and 11 federal dependencies (Dependencias Federales).
Maduro’s promise is to give each federal state a million Petro tokens twice a month. However, he has not specified how long this airdrop will last.
The federal states will be free to use the tokens in the way they see fit and the goal of this initiative would be to achieve mass adoption of Petro.
However, Maduro’s decision has raised some doubts. At the moment, there would be in theory about 100 million Petro tokens in circulation, however, with the airdrop, the quantity of Petro distributed could easily exceed this threshold.
Given that, theoretically, the value of Petro is anchored to that of oil, and since, again in theory, it should be backed by physical reserves of oil, the airdrop seems incompatible with maintaining the value of Petro anchored to that of oil.
In other words, it would seem that Venezuela is starting to create large quantities of Petro from nothing, which is exactly how it did for a long time with Bolivar, causing hyperinflation.
However, there are still no technical confirmations of the numbers illustrated by Maduro, so the reality might be different.
As has already been shown in the past, Petro exists and can be used with special wallets, so the airdrop aimed at mass adoption would make sense. What instead casts enormous doubt on this initiative is the fact that, if things go exactly as promised by Maduro, Petro would become an inflationary currency, and given what happened in the past to the Bolivar, at this point there is nothing surprising if over time it started to suffer from hyperinflation, as happened to its predecessor.