Venezuela Launches Petro: Will It Suffer the Same Fate as the Bolívar?

Venezuelan cryptocurrency

Venezuelan cryptocurrency"Petro logo is seen during its launching in Caracas Venezuela

According to him, the Petro would help Venezuela to overcome a financial blockade from the United States and thus move "towards new forms of worldwide financing for the economic and social development of the country".

Venezuela's Constituent Assembly voted to bring presidential elections forward in late January.

The cryptocurrency was created in an effort to circumvent the financial sanctions against Venezuela, the USA and the European Union. That might knock the price down, considering its poor management of the country's tumbling offline currency, the bolivar. Venezuela struggles with hyperinflation and a socialist economy that is in trouble.

Opposition officials branded the cryptocurrency illegal, warning that it circumvented Venezuela's majority-opposition legislature.

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.

One thing we do know now is that the Petro is supposed to be backed by the country's oil, gas, gold and diamond riches. However, the initiative has attracted stark criticism, including from lawmakers both inside and outside of the country. This decision is taken in an attempt to coubter economic sanctions imposed by the USA government. The establishment outlined its expectations, as well as, plans for the petro in its web portal meant for the virtual currency hosted by Ministerio del Poder Popular para Education Universitaria Ciencia, Technologia, reported.

Last week the Venezuelan Cryptocurrency Superintendent Carlos Vargas said they were hoping to attract investors from Qatar, Turkey, the Middle East, Europe and the USA.

The value of the total petro issuance of 100 million tokens is estimated to be just over $6 billion. However, during his recent evening address, Maduro did not reveal any new price information.

"Petro will be an instrument for Venezuela's economic stability and financial independence, coupled with an ambitious and global vision for the creation of a freer, more balanced and fairer worldwide financial system", the government said in a 22-page white paper, translated into English, outlining its plans. They block USA banks and investors from acquiring newly issued Venezuelan debt, effectively preventing the nation from borrowing overseas to bring in new hard currency or refinance existing debt.

The white paper notes that the tokens sold at pre-sale are actually assets on the NEM blockchain and not the tokens that will function on the Petro network.

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