Venezuela launches its oil-backed crypto-currency, the petro


Two months after Venezuelan President Nicolas Maduro surprised analysts and the cryptocurrency world with his idea to launch an oil-backed cryptocurrency, the socialist president said early on Tuesday that Venezuela had just launched its El Petro that would strengthen the country's economy, while the USA mulls over oil sanctions, and the Venezuelan economy and its oil production continue to slide.

The petro is different from almost all other cryptocurrencies in that it has the enthusiastic support of the state; Russian Federation reportedly also has considered creating its own cryptocurrency to skirt global sanctions.

The Venezuelan leader said he expected the Petro to open "new avenues of financing" in the face of Washington's sanctions, which prohibit U.S. citizens and companies from trading debt issued by the country and its oil company, PDVSA. The short answer is: "It simply can't". The government has promised that Venezuelans will be able to use the coins to pay taxes and public services.

But the U.S. Treasury Department has thrown a damper on the release, warning U.S. citizens and companies who buy the petro that they could be violating sanctions. A top official of Venezuela's ruling Socialist party yesterday proposed holding legislative elections more than two years early to coincide with a presidential vote in April.

As reported by Reuters, the President also mocked the U.S by referring it to the comic character of Superman and said: "Today, a cryptocurrency is being born that can take on Superman".

Mr. Maduro has touted the petro as fulfilling the late Hugo Chavez's dream of upending global capitalism away from the dominance of the USA dollar and Wall Street.

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Bitcoin and other digital tokens are already widely used in Venezuela as a hedge against hyperinflation and an easy-to-use mechanism for paying for everything from doctors*visits to honeymoons in a country where obtaining hard currency requires transactions in the illegal black market.

So they created a new one. The Venezuelan opposition says that is the result of years of under-investment and corruption.

"You can not stop hyperinflation by creating a new currency and doing nothing else", Mr. Leidenz said. "The government has no plans of undertaking structural reform".

The presale was launched Tuesday and is planned to last into next month. Maduro has also claimed that 100 million petros will be made available at a value of more than $6 billion.

Venezuelan President Nicolás Maduro hopes that Petro will become an alternative national currency to the bolivar, which is now only worth 0.00004 Dollars - after years of hyperinflation.

The new cryptocurrency will be backed by reserves of Venezuelan wealth in gold, oil, gas, and diamonds. One document highlights the use of Ethereum network while another document which is now being referred to as the buyer's guide shows the use of NEM blockchain system.