Venezuela Released “Petro”, First Oil-Based Cryptocurrency

President Nicolas Maduro said Tuesday that Venezuela had received $735 million in the first day of a pre-sale of the country’s “petro” cryptocurrency, aimed at pulling the country out of an economic tailspin.

This crisis-ridden country announced creation of this oil-backed cryptocurrency three months ago when President Nicolas Maduro said that they need something that should fight off the effects of the US-led sanctions.

The petro, he then said, would help Venezuela “advance in issues of monetary sovereignty, to make financial transactions and overcome the financial blockade.”

This move came amid a plunge in the value of the bolivar against the U.S. dollar, and weeks 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.

The pre-sale of the “petro,” which will represent a barrel of crude from a specific division in the country’s Orinoco oil belt, started with offering $60 tokens to investors at discounted rates that they can exchange for. The entire circulation of 100 million petro tokens will be available in its initial coin offering (ICO), with the government expecting the cryptocurrency’s launch to raise $6bn. It initially won’t be available in to purchase in exchange for the Venezuelan bolivar, which has plummeted in value, but this could become an option in the future.

Today is the day the Petro is born. We are on the world’s financial vanguard. Our response to great problems is great solutions and good will,” said Maduro, and added that the project raised $735 million dollars on the first day. “The game took off successfully,” he said.

Venezuela says it expects to attracts investors from Qatar, Turkey, the US and Europe.

The most important contribution of petro to the cryptoassets’ market and the new digital economy will be the support offered by a sovereign state,” reads the website for Petro.

The petro will not be a token on the Ethereum network, as was previously disclosed in a whitepaper provided by the government.

Teuta Franjkovic

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