Venezuela CBDC Tracker

Venezuela is in the research phase of its central bank digital currency (CBDC) development. For many years, the “petro” was a pet project of Venezuelan President Nicolás Maduro. The petro is commonly called a cryptocurrency, but it was effectively a CBDC. The whitepaper described it as a “sovereign crypto asset backed by oil assets and issued by the Venezuelan State.” In the end, the petro was shut down in 2024. At one point, it seemed that the Banco Central de Venezuela went back to the drawing board to launch what it called the Bolívar Digital. However, what was eventually put out was not a CBDC in practice. So, while the central bank can be said to be considering CBDCs, it does not appear to have progressed beyond that.

Current human rights and civil liberties concerns in Venezuela include oppression and corruption. For example, according to Freedom House, “Opposition leaders have long been harassed, attacked, imprisoned, and otherwise impeded from participating in political processes.” Unfortunately, a CBDC could be used as another tool in this effort.

CBDC History and Development

In 2017, Venezuelan President Nicolás Maduro announced that “Venezuela will create a cryptocurrency” (called the petro) and it would “advance in issues of monetary sovereignty, to make financial transactions and overcome the financial blockade.” Maduro also added that it would be backed by Venezuela’s oil and gold reserves.

Although President Nicolás Maduro and others refer to the petro as a “cryptocurrency,” it’s more accurate to think of it as a CBDC. Looking at the Petro whitepaper can help explain why. The paper opens by stating that the “Petro will be a sovereign crypto asset backed by oil assets and issued by the Venezuelan State.” Put differently, the petro is a digital currency created and controlled by the Venezuelan government. So, even though the central bank does not appear to have been involved, the Petro is effectively a CBDC. (It’s also worth noting that the term “CBDC” was far from common in 2018, especially in the Spanish-speaking world.)

The Petro whitepaper also shared a few other insights. First, in terms of influence, the petro seems to have been inspired by both Bitcoin and the initial coin offering craze of 2017. Much like how Bitcoin has a finite supply, the petro was also limited. The paper stated that the “Venezuelan State will not be able to [issue new] Petro.” And much like the initial coin offerings in 2017, the petro would have a pre-sale launch followed by a full launch. Curiously, the pre-sale would “consist of the creation and sale of [a] smart-asset on the NEM blockchain platform.” However, this “smart-asset” is not the petro. Instead, users would exchange it for the petro “any time between the launch date and the closing of the Initial Offer.”

In January 2018, President Nicolás Maduro said, “I have ordered the [issuance] of 100 million petros with the legal sustenance of Venezuela's certified and legalized oil wealth.” The petro officially launched a month later. Maduro said, “Today, a cryptocurrency is being born that can take on Superman” (likely a reference to the United States). He said the project raised $735 million on the first day. The official website for the petro included information for buyers and law enforcement.

In August 2018, President Nicolás Maduro announced the petro (and the sovereign bolivar) would be used as accounting units in Venezuela.

In October 2018, President Nicolás Maduro announced the official launch of the petro.

In November 2018, President Nicolás Maduro announced that 4 million petros were allocated to the “Petro Savings Plan” as part of the Economic Recovery Program.

In December 2018, President Nicolás Maduro announced that senior citizens were given a “Christmas bonus” with the petro.

In June 2019, President Nicolás Maduro announced the launch of the “Digital Bank for Youth and Students” in an attempt to raise the utility and promotion of the petro. Later that month, Venezuela's Minister of Habitat and Housing, Ildemaro Villarroel, announced housing projects would soon be financed with the petro.

In September 2019, President Nicolás Maduro announced that he “approved 43,958 Petros to build 8,342 homes under the 'Petro Incentive' program.”

In October 2019, President Nicolás Maduro announced that the 3 million people using the petro savings plan would be rewarded for having “trusted this initiative.” However, it’s unclear what the reward was.

In November 2019, President Nicolás Maduro wrote that 900 businesses in Venezuela were accepting the petro. On that same day, Maduro inaugurated “23 Petro ticket offices” at the Banco Central de Venezuela. Just 14 days later, Maduro wrote that the number had jumped to “27,000 companies with more than 100,000 businesses.” Maduro also announced that healthcare workers and pensioners would receive “have a convertible Petro so they can go out and buy whatever they need during the holiday season.”

In January 2020, President Nicolás Maduro wrote, “We are building our cryptocurrency ecosystem, placing 4.5 million barrels of oil for sale in Petro. We will then begin regular supply of 50,000 barrels per day as an exploration mechanism, until we reach the goal of selling all production in Petro.”

In February 2021, Venezuelan President Nicolás Maduro said, “We have a surprise: the digital bolivar.” Details were limited at the time, but El Nacional reported that the digital bolivar was going to be part of a larger plan to digitize the economy. How this effort related to the petro was unclear.

In August 2021, the Banco Central de Venezuela announced that it was going to launch what initially appeared to be a CBDC (referred to as the Bolívar Digital or digital bolivar) on October 1. The announcement noted the CBDC would be issued alongside a currency devaluation that removed six zeroes from the currency (i.e., 1,000,000 sovereign bolivars are equal to 1 digital bolivar). The central bank further noted that “In order to maintain the inclusion of all Venezuelans and meet their transactions needs… the [central bank] will continue to handle the issuance of the bolivar in its physical form.” The central bank said it hoped the CBDC would help strengthen the bolivar and reduce transaction costs.

Shortly after the October 2021 launch of the “digital bolivar,” it quickly became clear it was not a CBDC at all. As seen in this reporting by Bloomberg and in currency shops, the “digital bolivar” refers to a physical banknote. Miguel López, a financial and accounting consulting partner at EY Venezuela, told CoinDesk there are “no digital components that make the bolívar digital different from the sovereign bolivars, which could also be transacted electronically.” Alejandro Castro, a Venezuelan economist and operations manager at consulting firm Econométrica, further said, “In the end, the digital bolivar is digital in name, not in practice.”

In December 2021, Banco Central de Venezuela published a paper on CBDCs that ultimately appeared to confirm once more that the digital bolivar was anything but a CBDC. The report claimed at the time that only China had a CBDC. Furthermore, the paper made no mention of the digital bolivar or developments taking place at the Banco Central de Venezuela.

After years of silence, the petro was officially shut down in January 2024. Any remaining balances were converted to bolivars.

### Human Rights and Civil Liberties Concerns

Venezuela earned a 15 out of 100 in Freedom House’s 2023 Freedom in the World report. As Freedom House noted, “Venezuela’s democratic institutions have been deteriorating since 1999, but conditions have grown sharply worse in recent years due to harsher government crackdowns on the opposition and the ruling party’s use of thoroughly flawed elections to seize full control of state institutions.” The issuance or adoption of a CBDC in Venezuela could worsen these issues.

According to Freedom House, “Opposition leaders have long been harassed, attacked, imprisoned, and otherwise impeded from participating in political processes.” Unfortunately, a CBDC could be used as another tool in this effort. Across the world, governments have often turned to freezing and seizing the money of activists, political rivals, and protestors to undermine the opposition. A CBDC would make such initiatives easier by allowing governments to take direct control of each citizen’s finances.

“Corruption is rampant in Venezuela,” said Freedom House. “The government’s economic policies—particularly its currency and price controls—offer significant opportunities for illicit market activity and collusion between public officials and organized crime networks.” The existence of pervasive corruption is a major concern with CBDCs because it calls into question any promises that might be made by the government to limit surveillance, control, or other risks of CBDCs. Furthermore, the existence of corruption calls into question whether CBDC policies might be designed to exert political favoritism through subsidies, price controls, or other targeted restrictions.

For additional information on concerns regarding violations of human rights and civil liberties, see the following reports by Amnesty International, Financial Tyranny Index, Freedom House, Human Rights Watch, Privacy International, and the U.S. Department of State. For additional information on concerns regarding the risks of CBDCs, see the following webpage and report by the Cato Institute: The Risks of CBDCs and Central Bank Digital Currency: Assessing the Risks and Dispelling the Myths.

For additional information regarding metrics, the methodology page explains each of the data points and provides their respective sources.