VENEZUELA: Government Launches Pre-sale Of Petro, Its Crypto-currency

- Venezuela's President Nicolas Maduro said on February 20 that Venezuela had received $735 million on the first day of a presale of the country's crypto-currency, dubbed petro.

Maduro had previously said that 100 million petro tokens worth some $6 billion will be issued.

Venezuela has now launched what it claims to be the world's first sovereign oil-backed cryptocurrency. "We are on the world's technological vanguard".

The petro's unveiling played out before a live studio audience inside the presidential palace Miraflores, complete with red carpets and a splashy set prominently displaying a crafted marketing symbol "P", for petro. During a demonstration about the technology that will be put in place to support the Petro, it was revealed that a Russian company will run the platform.

"Today, a cryptocurrency is being born that can take on Superman", said Maduro said in a televised launch event Tuesday night, using the comic character to refer to the United States.

The annual survey, published on Wednesday by three universities, is one of the most closely-followed assessments of Venezuelans' well being amid a government information vacuum and shows a steady rise in poverty and hunger in recent years.

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Venezuela's president received a multitude of warnings about issuing the crypto, and he ignored every one of them. The opposition leaders have also said the sale is an illegal debt issue that is circumventing the Venezuelan legislature, while the US Treasury Department warned that this could break the sanctions imposed past year. The token's value will be pegged to the price of a barrel of crude oil and the initial coin offering is expected to begin early this year.

Over 60 percent of Venezuelans surveyed said that during the previous three months they had woken up hungry because they did not have enough money to buy food.

As the bolívar, the fiat currency of Venezuela, has failed, the government will accept the Petro as payment for things like national taxes and public services.

Squinting the eyes and suspending disbelief might just make the petro look like a decent investment to some.

Raising further doubts, Maduro has said that the undeveloped Orinoco oilfield will back the digital currency, creating no tangible barrels of oil that investors can cash in, said Jean Paul Leidenz, a senior economist at Caracas-based EcoAnalitica. According to him, the Petro would help Venezuela to overcome a financial blockade from the United States and thus move "towards new forms of global financing for the economic and social development of the country". Recent estimates by the International Monetary Fund put the inflation at over 13,000 percent for 2018.

  • Sonia Alvarado