Key points:

• Venezuelan President Nicolas Maduro launched the oil-backed cryptocurrency Petro (PTR) in February 2018.。
• The Petro (PTR) is backed by the country's oil reserves and is designed to support the country's fiat currency, the bolivar.。
• -- U.S. sanctions have exacerbated the economic crisis, leading to a rapid devaluation of the bolivar in recent years.。

On Monday, January 15, 2023, Venezuela announced its decision to phase out its government-backed cryptocurrency, the Petro (PTR), just five years after it was first launched in February 2018.。

The news was displayed on the local Patria platform, the only trading site for Petro。

Venezuelan President Nicolas Maduro launched the Petro's pre-sale in February 2018 to bolster the country's fiat currency, the bolivar, easing an economic crisis exacerbated by U.S. sanctions.。

The Petro token is backed by the country's rich oil reserves, but unfortunately, even before its launch, it was embroiled in controversy.。

First, the country's opposition-controlled Congress says it is illegal to use oil reserves as collateral。In 2019, US authorities imposed sanctions on the Russian bank for financing the Petro cryptocurrency.。

Meanwhile, the Maduro-led Venezuelan government has repeatedly tried to tie the Petro to basic social services in the country.。For example, one of the conditions for obtaining a passport is funding for social housing programmes, while 50 per cent of the minimum wage is tied to the Petro。

A corruption scandal surrounding financial improprieties in oil operations using crypto assets led to the resignation of Oil Minister Tarek El-Isami, the final straw for Petro.。There has also been a crackdown on bitcoin mining since then.。

According to local reports, all remaining Petro tokens will be converted into bolivars.。