Venezuela starts its own oil-backed cryptocurrency

Frederick Owens
February 22, 2018

In a statement, the group said the April vote was "simply a show by the government to demonstrate a legitimacy it doesn't have amid the agony and suffering of Venezuelans".

Venezuela's opposition coalition said on Wednesday it could not participate in a "fraudulent, illegitimate" presidential election on April 22 due to unfair conditions created by President Nicolas Maduro's government. The token is backed by the country's crude oil reserves, which are the largest in the world.

Some US lawmakers have also expressed concerns about petro, and asked the country's Treasury Department in January to monitor and restrict the currency.

The official website for the petro on Tuesday published a guide to setting up a virtual wallet to hold the cryptocurrency. Strong interest was expected from Turkey, Qatar, Europe and the U.S. when the sale is opened up, according to Venezuela's crypto regulator, Carlos Vargas. One report from the launch livestream said it had raised the equivalent of 4.7 billion yuan (or 735 million USD) from the pre-sale. Venezuelan crypto exchanges that wish to trade PTR have to be licensed by the government. According to the white paper, it will be on the NEM blockchain platform. But the opposition-controlled legislature has declared the petro illegal, meaning it may well refuse to honor the coin once current leaders eventually depart.

Speaking at the launch on Tuesday, Maduro claimed that the currency is meant to help solve his country's grave economic problems.

"The Bolivarian Republic of Venezuela guarantees that it will accept PETRO as a form of payment of taxes, fees, contributions and national public services, taking as a reference the price of the barrel of the Venezuelan basket of the previous day with a discount".

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The bolivar is nearly worthless because of the hyperinflation that has plagued the economy in recent months.

Venezuela has made history not only as the first country to launch a blockchain-based digital currency, but to also refer to it officially as an ICO.

The Petro will be an instrument for the creation of a "freer, more balanced and fairer worldwide financial system", the site also said.

Maduro said Venezuela is the victim of an "economic war" led by opposition politicians with the help of the government of US President Donald Trump. "It will allow us to overcome any financial blockade".

In December, Venezuela's government confirmed that it would be launching a cryptocurrency backed by oil assets, but never announced a concrete launch date.

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