Venezuelan Lawmakers Against Their President: Is Petro Illegal?
The Government Says Petro to be Sold to Private Exchanges
Even though it seemed that the initial coin offering pre-sale for Venezuela’s high-profile Petro cryptocurrency has been a success, one of Venezuela’s two opposing lawmaking bodies has ruled that the country’s issuance of a national cryptocurrency is illegal under domestic law.
We already talked about possibilities that Petro could be illegal. President Maduro’s government isn’t really “liked” with domestic population. The country’s rate of hyperinflation is currently running at more than 5,000% a year. The people in the country are hungry and it’s obvious that the government is trying to fox things. Maduro announced an increase in the national food voucher program, the minimum wage and wage tables. The announcement of a 67 percent increase in the voucher program and 58 percent increases to the minimum wage and wage tables.
However, it seems clear that the opposition wants to take lead. In their opinion, creation of the Petro was illegal.
On the other hand, Venezuelan Vice-President Tareck El Aissami announced that the country’s Dicom foreign exchange will begin auctioning Petro, to private companies. “The Petro is going to be auctioned on Dicom,” El Aissami said.
BBH: Petro is just a fraud
“Because it appears to be a form of debt, they claim it must be approved by the legislature,” states at Brown Brothers Harriman report. They were also noting that the project is a fraud and a threat to potential investors.
In a public statement, the group’s members were against the sale, which is said to have already raised $735 million. Bear in mind, just last week, president Maduro said that “the Petro will influence the future of the economy, production, commerce and finances in our region, in South America and the Caribbean.” He also said the offers were made by 87,284 internet users, of which 3,523 are legally registered companies and more than 83 thousand are individuals interested in investing in the cryptocurrency.
“I call for no one to doubt the Petro. The Petro is the future of the cryptocurrency monetary system and Venezuela is on the lead. It’s the first country to create a digital coin, a state-backed cryptocurrency,” said Maduro.
The move came amid a plunge in the value of the bolivar against the U.S. dollar, and after the government issued a new 100,000-bolivar note. Rapid inflation of the bolivar has led to a surge in consumer prices that has exacerbated the crisis there.
Maduro’s pivot away from the U.S. dollar comes after the recent spectacular rise of bitcoin, which has been fueled by signs that the digital currency is slowly gaining traction in the mainstream investment world.
Maduro also approved the creation of a BlockchainBase observatory to oversee the development and rollout of the new cryptocurrency.
Bitcoin has a strong following among Venezuelans seeking to bypass government regulations or make purchases online, including purchases of illicit contraband. Many early adopters of the cryptocurrency used the country’s subsidized electricity to mine bitcoin with little-to-no overhead, generating hundreds of dollars from the socialist energy grid – as well as the attention of law enforcement.