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July 22, 2019

Venezuela attracted 735 million USD from its cryptocurrency Petro


PetroVenezuela attracted 735 million USD on the first day of selling its own cryptocurrency Petro, revealed the country’s president Nicolas Maduro. The initial coin offering (ICO) aimed to bring the country out of the economic crisis. Maduro hopes that oil will allow the affected OPEC member to compensate the US sanctions, while the currency Bolivar is falling to record levels, and the country is struggling with hyperinflation and a collapsing socialist economy.

The head of state did not give details of the original investors, and no evidence was provided for his statement about the amount raised. He added that many transactions in tourism, gasoline and oil can be carried out with Petro. Last week, however, the Venezuelan head of the cryptocurrency project, Carlos Vargas, explained that the government is expecting investors from Turkey, Qatar, the United States and Europe.

“Today borns cryptocurrency that can be based on Superman”, said Maduro during a televised address using the comic character, but considering the United States.

The official Petro website, which was released on Tuesday, has a guide to creating a virtual wallet to keep cryptocurrency publicly available next month. The cost of all 100 million tokens would be slightly over 6 billion USD, according to data provided by Nicolas Maduro in recent months, although no new price information was provided.

“Each token will be valued and supported by 1 barrel of crude oil from Venezuela”, said Maduro. The government advisers have recently recommended 38.4$ of all tokens to be sold at a private auction at a discount of 60%.

The president announced that a total of 100 million tokens of currency will be released, of which 82.4 million will be available to investors. The price of one Petro will be about 60 USD, as is currently worth a barrel of Venezuelan oil.

Petro differs from the other cryptocurrencies because it is almost the only one in the world that will be secured by real assets. At Maduro’s disposal, the state has allocated 5 billion barrels of the Ayacucho deposit. The authorities hope that the cryptocurrency will allow them to successfully raise funds from abroad that are essential to the country hit by the crisis.

However, this optimism is not shared abroad. The idea of ‚Äč‚Äčlaunching its own cryptocurrency is overwhelmingly skeptical, as many people doubt that this venture will bring benefits to both Venezuela’s economy and people who suffer from food and medicine shortages.

Many people from the industry consider the release of Petro as beta test of Russian specialists for issuing their own cryptocurrency. The technology was developed by Russian experts with assistance of Venezuelan authorities.

The blockchain technology experts have warned that Petro is unlikely to attract significant investment. The opposition leaders have also said the sale is an illegal debt issue that is circumventing the Venezuelan legislature, while the US Treasury Department warned that this could break the sanctions imposed last year.


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