Early December of last year Venezuelan president Nicolas Maduro announced the creation of an official cryptocurrency for the country. US sanctions against Venezuela’s access to international banks have spurred economic turmoil through out the country and crypto will be used to circumvent banking sanctions.
The OPEC nation struggles with widespread shortages of food and essential living supplies and their official currency, the Bolivar, has dropped to a value of 1 Bolivar = .10 USD. The new Venezuelan cryptocurrency is known as The Petro and will sell $2.3 billion of its supply on discount up to 60% in private offerings.
Maduro has been quoted,
“The center of financial policy will be the consolidation of the Petro.”
“This cryptocurrency is the future of humanity. Venezuela has entered the future.”
Each Petro would be backed by one barrel (current price $60/barrel) of Venezuelan oil and would be sold at the same price. That would put the value of the entire Petro issuance of 100 million tokens at just over $6 billion.
All is not well for Maduro’s crypto plans as Venezuelan congress and high ranking government advisers state that it is illegal to use the country’s oil reserves to issue debt due to the hydrocarbons law. All though it is not certain how the legality will play out, Maduro plans to list the Petro on online exchanges. The currency will be premined and rumored to be used on the Ethereum network.