The demise of Oil Coin: "One who issued a Memecoin arrested the issuer of RWA Coin"

Author: Xiao Bing | Deep Tide TechFlow

On January 3, 2026, the U.S. military launched a “large-scale” attack on Venezuela, and President Maduro was swiftly arrested and transferred.

Some commented, “The one who issued Memecoin has been arrested, while the issuer of RWA Token remains free.”

And indeed, that is the case.

On February 20, 2018, Venezuelan President Maduro announced on television the issuance of the world’s first sovereign-backed digital currency, the Petro.

At that time, Venezuela was deep in its worst economic crisis in history, with inflation soaring to nearly 1,000,000% (you read that right), and the national currency, the Bolivar, was depreciating like worthless paper. U.S. sanctions further worsened the situation, choking the country’s economic lifeline and isolating it from the global financial system.

Maduro hoped that this digital currency could be the last straw to save the nation.

However, by early 2024, when the Venezuelan government quietly terminated the Petro, the world hardly paid much attention.

This digital symbol, once hailed as the “world’s first sovereign cryptocurrency,” almost never truly “lived” during its brief existence. Its end marked the silent curtain fall of a noisy drama, drawing a line under a surreal story revolving around cryptography, national sovereignty, and economic collapse.

The fate of the Petro reflects a complete collapse of the country’s governance system.

Ruins and the Birth of Petro

To understand Petro, one must first understand Venezuela before its birth.

It was a country scorched by hyperinflation, with the old currency, the Bolivar, losing value by the hour, wiping out citizens’ lifelong savings overnight. Meanwhile, U.S. sanctions acted like an invisible noose tightening around Venezuela’s economy, nearly severing it from the global financial system.

On this economic wreckage, Petro was born, carrying an almost impossible “national salvation” mission.

Its blueprint was grand and enticing.

First, Petro aimed to bypass the dollar-dominated international financial system through blockchain, opening a new channel for financing and payments; second, it claimed each Petro was backed by one barrel of real oil, with a total of 100 million Petro valued at 60 billion USD.

In August 2018, Venezuela officially established Petro as its second official currency, alongside the battered Bolivar.

Maduro’s government promoted Petro with unprecedented effort.

Pensions for retirees were paid in Petro, and Christmas bonuses for civil servants and soldiers were also converted into this digital currency. Maduro even live-streamed on TV at the end of 2019, “airdropping” 0.5 Petro as a Christmas gift to retirees nationwide.

Beyond domestic promotion, Venezuela also sought to rally more countries to use Petro.

Time magazine once reported that Petro received personal approval from Putin, with Russia dispatching two advisors to participate in project design. Russia promised to invest in Petro and considered using this digital currency for bilateral trade settlements to jointly oppose dollar hegemony.

Venezuela also tried to promote Petro among OPEC members, aiming to create a de-dollarized oil trade system. Oil Minister Quvedo publicly stated: “Petro will become a settlement method accepted by all OPEC member countries.”

To encourage wider use, Maduro’s government transformed into a crypto project team, building complete infrastructure, providing detailed purchase tutorials on the official website, and even developing four ecological apps. Six exchanges, including Cave Blockchain and Bancar, were authorized to sell Petro publicly.

But reality soon delivered a heavy blow to Maduro’s government.

Public Indifference and Skepticism

The government’s enthusiastic promotion faced collective indifference from the public.

Under Maduro’s Facebook post announcing Petro, the most liked comment read: “Unbelievable that anyone still supports this terrible government… they are destroying the entire country.” Another popular comment said: “The government is used to making every stupid thing fail and blaming other countries.”

Venezuelan media figure Gonzalo’s comment on Twitter was even sharper: “Petro is the anesthetic for this failed country.”

Disastrous user experience further eroded public trust. Registering for Petro was extremely strict, requiring uploading ID front and back, detailed address, phone number, etc., but applications were often inexplicably rejected. Even if registration succeeded, the “Homeland Wallet” system frequently malfunctioned, often unusable.

Worse still was the payment experience. Many merchants reported failed Petro payments, and the government had to admit system flaws and offer compensation.

A Venezuelan woman said: “Here, we don’t feel the existence of Petro at all.”

Externally, the U.S. government also targeted Petro precisely.

In March 2018, just one month after Petro’s launch, Trump signed an executive order banning U.S. citizens from purchasing, holding, or trading Petro. The Treasury Department explicitly stated that any transactions involving Petro would be considered violations of sanctions against Venezuela.

Sanctions quickly expanded. In 2019, the U.S. sanctioned Moscow-based Evrofinance Mosnarbank, citing its role in financing Petro. The U.S. Treasury bluntly called Petro a failed project attempting to help Venezuela evade U.S. sanctions.

The Aircoin Cloaked in Oil

The most fatal flaw of Petro is that it is fundamentally flawed both technically and economically.

True cryptocurrencies rely on decentralization to build trust. Petro, however, is a centralized database fully controlled by the government.

For an ordinary Venezuelan, this means the value of Petro in their digital wallet is not determined by market forces but can be arbitrarily changed by a presidential decree.

The Venezuelan government claimed each Petro was backed by one barrel of oil from Atapirire, a small town in Ayacucho, with reserves of 5.3 billion barrels. But a Reuters investigation found the roads in the area were dilapidated, oil well equipment rusted, and the region overgrown with weeds, with no signs of large-scale oil extraction.

In exile, former Venezuelan oil minister Rafael Ramirez estimated that extracting the 5.3 billion barrels of oil promised by the government would require at least 20 billion USD in investment. For a government that needs to import basic food, this is utterly unrealistic.

Ramirez bluntly stated: “Petro is set at an arbitrary value; it only exists in the government’s imagination.”

Even more absurdly, the Venezuelan government later quietly changed the backing assets of Petro from 100% oil to a mixed backing of oil, gold, iron, and diamonds in proportions of 50%, 20%, 20%, and 10%.

Such arbitrary modifications of the “white paper” are notorious even in the crypto world.

On the technical side, the issues are equally severe. Petro claims to be based on blockchain technology, but its block explorer shows highly abnormal data. The white paper states Petro should generate a block every minute like Dash, but the actual block interval is 15 minutes, with almost no on-chain transaction records.

Unlike truly decentralized cryptocurrencies like Bitcoin, Petro’s price is entirely controlled by the government. The exchange rate initially was 1 Petro = 3,600 Bolivar, then arbitrarily adjusted to 6,000, and later to 9,000.

Although the government announced an official price of 60 USD for Petro, in Caracas’s black market, people could only exchange it for goods or cash worth less than 10 USD, if they were lucky enough to find someone willing to accept it.

Essentially, Petro is a control tool disguised as a blockchain.

The Final Blow, Internal Corruption

If Petro’s life was slowly ebbing away, the final straw was a shocking internal corruption scandal.

On March 20, 2023, a “seismic” event shook Venezuelan politics.

Core members of Maduro’s government, including Oil Minister Tareck El Aissami, suddenly resigned.

A few days earlier, anti-corruption police arrested his close aide, Joselit Ramírez Camacho, head of SUNACRIP, the national digital currency regulator, which is the core department responsible for Petro’s regulation and operation.

As investigations deepened, a multi-billion-dollar scam surfaced.

Prosecutor Tarek William Saab revealed that some high-ranking officials used the crypto regulator and oil companies to sign “administratively uncontrolled or guaranteed” oil loading contracts. The proceeds from oil sales were not paid to the national oil company but transferred into private pockets via cryptocurrency.

Investigations showed that this corruption network involved between 3 billion and 20 billion USD, with the illicit funds used to buy real estate, digital currencies, and crypto mining farms.

In April 2024, Oil Minister Tareck El Aissami was arrested, facing charges of treason, money laundering, and organized crime. Over 54 people were prosecuted for involvement in this corruption scheme.

This scandal dealt a devastating blow to Venezuela’s crypto industry. SUNACRIP was forced to suspend operations, and the government launched a nationwide anti-mining campaign, seizing over 11,000 ASIC miners and disconnecting all crypto farms from the national grid.

By 2024, the government had halted Petro trading, banned crypto mining nationwide, and shut down all authorized exchanges. A once-promoted industry was completely collapsed by corruption.

Petro’s experiment failed not because of Washington’s bans but because of its own rot.

A tool designed to counter external sanctions ultimately became a vehicle for corrupt officials to launder money.

A Microcosm of a National Failure

The trajectory of Petro’s failure almost perfectly mirrors Venezuela’s broader governance failure.

It is a “band-aid” policy. Faced with deep-rooted economic structural problems, the government chose to create a glamorous gimmick, attempting to mask the real economic rot with a digital illusion. Like a leaning building caused by foundation collapse, officials simply painted a bright coat on the exterior wall.

Maduro’s government tried to solve systemic issues through technological means, which is fundamentally a flawed approach. The value of a digital currency still depends on the credibility of its issuer. In a country with inflation rates reaching millions and basic necessities unguaranteed, how much trust can the government really have? Citizens don’t even trust the traditional currency issued by the government, so how can they accept a new digital currency?

Instead, Petro exhausted the last remnants of government credibility.

Imagine this scene: a retired teacher, whose lifelong savings have been swallowed by inflation, now receives her pension forcibly converted into Petro. She walks into shops with her phone, only to be told, “We don’t accept this,” or “The system is down.”

The root of Venezuela’s economic problems lies in fundamental structural flaws. The country suffers from the classic “Dutch disease,” over-reliance on oil exports leading to manufacturing decline and an extremely single economic structure. When oil prices fall, the entire economy collapses. Petro attempts to anchor to oil, but this only deepens dependence on oil without solving structural issues.

Practically, the Venezuelan government lacks the basic technical and operational capacity to implement blockchain projects. From abnormal blockchain data to payment system failures and arbitrary pricing mechanisms, every detail exposes the amateurish level, even worse than outsourced Shenzhen studios.

Today, Petro has completely disappeared into history. Maduro’s “national salvation experiment” ended in a crushing defeat, and Venezuela remains mired in chaos, with citizens continuing to suffer in the flames of inflation.

The country’s true way out is not to seek another “Petro-like” digital shortcut but to muster the courage to face reality, return to common sense, and undertake the long-overdue, arduous process of genuine reform.