The Strategist

Venezuela will issue its own crypto currency in six weeks

01/12/2018 - 14:20

The Venezuelan government, led by President Nicolas Maduro, announced plans to pre-mine its own crypto currency (PetroCoin), despite a boycott by the parliament. It is expected that the new crypto currency will be available for circulation in six weeks, local newspaper El Universal reports.

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The manager of crypto-currencies and related activities, Carlos Vargas, said: "It will be impossible to mine PetroCoin, all emissions will be under the control of the country." In addition, a procedure similar to an auction will be held. "

He also added: "We will have a crypto currency, verification and use of which on all exchanges ... will be provided by a well-known platform, so that Petro will be available around the world without serious restrictions."

Vargas did not specify what exactly crypto-currency platform he meant. However, some users found image of the Ethereum tokens on the website of the Venezuelan Ministry of Communications, which may indicate the use of the Ethereum blockchain system with its ERC20 standard, which just implies a crypto currency pre-mine.

Last week Maduro announced beginning of the emission of the first 100 million new national crypto currency Petro. According to him, the use of new technology will help overcome the financial blockade of Venezuela.

The real Venezuelan currency (bolivar) is in free fall, and the country is very short of basic needs, such as food and medicine. Sanctions imposed by the administration of US President Donald Trump infringe on Venezuela's ability to transfer money through international banks.

In addition, Washington imposed sanctions against Venezuelan officials, PDVSA executives and the country's debt bonds.

Maduro said that the new crypto currency will be backed by the country's reserves of oil, gold and diamonds. The Ministry of Finance of Venezuela clarified that the crypto currency is necessary to carry out financial transactions and to seek new ways of financing. Venezuela has allocated 5 billion barrels of oil to ensure the value of the created crypto currency.

Vargas called disregard for its own country the parliament's decision to recognize the new crypto currency legal, explaining this by the fact that Petro gives Venezuelans an instant opportunity to protect themselves from inflation.

Recall, the Venezuelan parliament on Tuesday stated that release of the new national crypto currency Petro illegal, saying that it contradicts the country's constitution. In the absence of pro-government deputies, Congress approved a document revoking the decree of Venezuela's President Nicolas Maduro on the release of Petro.

"This fraudulent policy is neither studied nor approved," MP Carlos Valero commented on the decision of the assembly. According to him, no crypto currency will help solve the country's problems when inflation is reaching 2616%.

According to opposition deputies, the country's authorities issued a crypto currency to "avoid control over public debt operations" and get financing "illegally", as well as to avoid pressure due to late payments on a number of bonds that occurred in recent months.

In addition, in their opinion, provision of Petro with oil reserves in the area of the Orinoco River violates the country's legislation.

The Venezuelan parliament is virtually excluded from the decision-making system in the South American country. It functions were completely transferred to the pro-presidential National Constituent Assembly, which is involved in, among other things, drafting changes to the constitution, and has also assumed the full scope of the legislative power.


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