Because allowing the transfers enriched those in power, helping keep the leadership in place and the people down. For the record this is something you can vote on and change, because it’s a group decision. Unlike all those poor scammers who keep getting blacklisted from exchanges and such.

Secondarily, crypto is no panacea here. You can’t solve the initial distribution problem. How do you decide which individual gets how many coins to start?

If you ignore that issue, and if you can only trade within the country the total amount of crypto and the total amount of local currency remains the same meaning the total net welfare has not improved. If you can trade outside the country a myriad better options exist.

Crypto doesn’t help here either, it just purports to through magic of the blockchain. What’s necessary isn’t magic beans that live in computers but for the locals to rise up and overthrow their local governments and institute proper monetary and fiscal policy.

Concrete example: why don’t people use bitcoin in Venezuela (separate from the fact a single transaction costs a few weeks wages)? It’s been 11 years and were still waiting like skeletons for op to deliver. How did the Petro change the situation there?