Venezuela poised to launch 'petro' cryptocurrency



A “pre-sale” of Venezuela’s new "petro" cryptocurrency will begin on Tuesday, a move that the government hopes will skirt financial sanctions by Washington and help pull the country out of a dire economic crisis.

President Nicolas Maduro has previously said that the government will issue 100 million tokens, each valued at-and backed by-the equivalent of one barrel of Venezuelan crude.

That would put the value of the entire petro issuance at just over six billion dollars.

“All the cryptocurrencies of the world have been revalued after Venezuela’s announcements about the creation of the petro,” said Maduro in a speech broadcast on state television.

The OPEC nation is seeking to raise hard currency amid a crippling crisis.

Venezuela’s government has said that the petro issue will help the cash-strapped country make financial transactions and overcome US sanctions against Maduro’s government.

Skeptics say that concerns about Venezuela’s financial solvency will likely limit investor interest, while the US Treasury Department has warned the petro may violate sanctions against the OPEC nation.

“On Tuesday, there will be quite a few announcements about the start of the process,” Venezuelan Cryptocurrency Superintendent Carlos Vargas said on the sidelines of a political meeting in Caracas.

“And there will surely be a lot of investors from Qatar, Turkey, and other parts of the Middle East, though Europeans and Americans will also participate.”

He did not elaborate.

The Venezuelan government has not provided full details about the petro. But advisers working for the government recommended that 38.4 percent of the petros should be sold in a private auction at a discount of 60 percent.

Venezuela is suffering quadruple-digit inflation and chronic shortages of food and medicine, which have spurred increased incidents of malnutrition and preventable diseases.

Maduro says his government is the victim of an “economic war” led by opposition politicians with the help of the government of US President Donald Trump.

Sanctions levied last year by Washington block US banks and investors from acquiring newly issued Venezuelan debt, effectively preventing the struggling nation from borrowing abroad to bring in new hard currency or refinance existing debt.