Digital economy

Maduro coin? Venezuela begins pre-sale of new cryptocurrency

The “petro” will be backed by the state’s oil, gold and diamond reserves, according to the president

Venezuelan president, Nicolás Maduro.
Venezuelan president, Nicolás Maduro.MIGUEL GUTIÉRREZ / EFE

Venezuela has launched the pre-sale of the “petro,” a new digital currency invented by the government of President Nicolas Maduro. “Today will go down in history. [Venezuela] is the first state, the first nation to launch a cryptocurrency, backed by its reserves,” said Venezuelan Vice-President Tareck El Aissami in a television announcement, in reference to the country’s oil, gold and diamonds.

Maduro said that the cyber money is aimed at overcoming the international economic blockade of the country

It is the only cryptocurrency in the world that will be supported by physical commodities, with 534 million barrels of oil located in the Orinoco Petroleum Belt in the south of Venezuela. President Nicolás Maduro said that the cyber money is aimed at overcoming the international economic blockade against the country. Venezuela has experienced severe cash flow problems, and ratings agency Standard & Poor’s recently declared the country in partial default after it failed to meet its debt-repayment deadline.

The devaluation of the national currency, the bolivar, has hurt Venezuela’s struggling economy. Maduro, however, argues that the new cryptocurrency will save the country from its financial woes. “The petro is born and it will be a complete success for the welfare of Venezuela,” the president wrote on Twitter. But questions about its legality have been raised by the opposition and even by former members of government, including Rafael Ramírez, the former energy minister and ex-chief of the state-run oil company PDVSA.

The price of the digital currency will be around $60, set at the cost of a barrel of Venezuelan oil mid-January

“Our Constitution reserves oil as a priority of the Venezuelan state, it belongs to the public domain and for that reason is inalienable and unenforceable; it can’t be seized nor used as any kind of guarantee,” said Ramírez in an article published on the chavista website Aporrea.

The pre-sale of the 38.4 million petros out of a total of 100 million will take place privately until March 19. A day later, 44 million petros will go on sale to the public, with the remaining 17.6 million to be reserved by the state. The price of the digital currency will be around $60, set at the cost of a barrel of Venezuelan oil mid-January, but may change depending on fluctuations in the oil market.

The Venezuelan government said the digital currency will be available at electronic trading centers across the world. Information on the conditions and use of the petro is available on its website. The Venezuelan Blockchain Observatory will be responsible for regulating the cryptocurrency.

English version by Melissa Kitson.

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