Venezuela Announces Oil-Backed Cryptocurrency Petro’s Presale on Februaryin News
The president of Venezuela Nicolas Maduro has said the pre-sale of the country's proposed cryptocurrency – the "petro" – will launch this month.
"I am announcing that on Feb. 20 of this year, Venezuela begins the presale of the cryptocurrency, the Petro."Mr. Maduro has already presented the white paper which details how the Petro will work and its link to crude oil. The white paper reveals that prior to the Petro’s launch, Venezuela will create a token on the Ethereum blockchain and sell it. Tokens are not cryptocurrencies like the Petro will be—they’re digital assets created out of thin air and their value is only whatever people are willing to pay for them. Venezuela is to issue some 100 million Petros. Most ICOs on Ethereum are used to raise money to fund development, but the real fundraiser for Venezuela will be the public offering of Petro itself. Instead, according to the white paper, the token pre-sale “will promote and guarantee demand for the Petro Initial Offer, which will be made later.”
Maduro said: “Petros will be available to acquire during the pre-sale, in the initial offer and the secondary market, once the initial sale process is completed. The total of Petros issued in circulation during the first year will exceed 100 thousand million Petros."Maduro’s aim for the Petro is that it can be used freely without US embargos preventing it from being used. Also, it will be free to use anywhere around the world. The Venezuelan government will accept Petros as payment for things like taxes and public services and will provide financial incentives for merchants in the country to adopt the Petro. The government also sees the Petro blockchain as being an information platform, much like how the Bitcoin blockchain can be used to host or track public records. The controversial token was announced back in December of last year, with the declared aim of bypassing financial sanctions. The country's opposition-run congress soon after declared that petro is "illegal" and that it would be effectively borrowing against the country's oil reserves. As such, the move would violate laws that specify the legislature must approve government borrowing.
"This is not a cryptocurrency, this is a forward sale of Venezuelan oil," said legislator Jorge Millan at the time, calling it "tailor-made for corruption."Do you think Maduro’s project will be successful? Share your thoughts in the comments section below.
Follow us on Twitter