Bradley attorney Steve Snyder was quoted in IDG Connect on how blockchain's global nature and liquidity have made it an attractive option for entrepreneurs — and government — in two Latin American countries facing financial crises. Argentina recently issued its own cryptocurrency, the bueno, which yielded better results than traditional VC funding. Meanwhile, Venezuela launched the petro and experienced vastly different results.
Snyder says that the petro has been heavily criticized for various changes and conflicting information provided as to the underpinning technology. This information is usually provided in a transparent manner in white papers, but for the petro the white paper was revised more than once and the details of the cryptocurrency are still unclear.
"The purported backing of the petro with resources has also been subject to questions given the lack of detail provided. The petro has largely been touted at a very high level, which prevents any realistic evaluation of its utility,” Snyder explained.
He emphasizes, though, that country-issued cryptocurrencies such as the petro and Argentina's buenos have had little to no real impact due to the fact that they are not traded on exchanges.
"There are some reports of Venezuelans being forced to use petros within the country, but without external value this is akin to providing food stamps. It is not establishing an alternative currency unless it attains value vis-à-vis other currencies," he added.
Snyder does believe, however, that the actions of these two countries, which are desperate for a non-traditional solution, may be signaling a real potential disruption to global economics saying, "If they show any promise other countries may follow suit."
The complete article, “Crypto Key to Currency Crisis in LatAm?” first appeared in IDG Connect on January 2, 2019.