“Petro” Cryptocurrency Pre-Sale Raises $735M USD, Venezuela’s President Claims

Announcements, News | February 21, 2018 By:

Venezuela’s President Nicolas Maduro has announced that the country’s oil-backed cryptocurrency ‘Petro’ has attracted $735 million in the first day of its pre-sale, which kicked off on  February 20 and is scheduled to run until March.

According to reports, investors were offered $60 “tokens” at discounted rates that they can exchange for Petro during the pre-sale. The Venezuelan president, however, did not give details about the initial investors and there was no evidence presented for his figure.

Hugbel Roa, the Minister of Popular Power for University Education, Science and Technology, said that each Petro will be equivalent to one barrel of oil, according to the fixed price of the Venezuelan basket in the international market. Roa also said that “the traffic to the web portal http://elpetro.gob.ve quintupled with the global announcement of the Petro pre-sale.”

“Today, a cryptocurrency is being born that can take on Superman,” said Maduro said in a televised launch event Tuesday night, using the comic character to refer to the United States. “We are in the technological and economic vanguard to overcome the speculation of international currencies that affect the lives of Venezuelans. The Petro reinforces our independence and economic sovereignty and will allow us to fight the greed of foreign powers that try to suffocate Venezuelan families to seize our oil.”

Venezualan opposition leaders have said that the sale constitutes an illegal debt issuance that circumvents the country’s majority-opposition legislature. US senators have also raised concerns that the cryptocurrency could be used to avoid sanctions.

Maduro said Venezuela is the victim of an “economic war” led by opposition politicians with the help of the government of US President Donald Trump. He is urging OPEC (Organization of the Petroleum Exporting Countries) members, who have been a victim of the US sanctions, to use its ‘Petro’ cryptocurrency in order to overcome the economic pressure put on them.

Some critics have expressed doubts that the Petro cryptocurrency will thrive, mainly because of lack of trust in a government whose debt is being renegotiated and whose policies have brought skyrocketing inflation.

“Theoretically, with cryptocurrencies you could bypass the US financial system … but everything depends on generating confidence,” said economist Henkel Garcia.

Consulting firm Eurasia Group estimated that although Venezuela could raise some $2 billion USD in the initial offer, it was “unlikely” that the Petro cryptocurrency would be established as “a credible means of exchange,” beyond short term interest.