Venezuela is planning to launch the public sale of its crude oil-backed cryptocurrency later this year, on 5th November. Petro (PTR) coins will be pre-mined by the government of Venezuela. This Petro coin is claimed to be backed by one barrel🛢 of Venezuela’s five billion barrels of oil reserves, part of which was said to be allocated specifically for Petro.
According to Petro’s whitepaper the cryptocurrency will be backed 50% by oil, 20% by gold, 20 by iron, and 10% by diamond assets. You should be able to purchase and trade Petro on 5th November, so about a month from now, on multiple cryptocurrency exchanges for other cryptocurrencies or for pretty much any convertible currency.
Despite its size, Venezuela has been blessed by large amounts of natural resources. The country has the largest crude oil reserves in the world, it’s 4th in natural gas, and it is also the richest country in gold. In 2012 96% of the country’s exports and nearly half of its fiscal revenue relied on oil production (source).
The Chavez government started nationalizations, mainly of the energy, construction, telecommunications, banking (Bank of Venezuela from the Spanish Santander), and perhaps most notably of the oil sector (parts of Exxon, British Petrol, Shell, ConocoPhillips, Chevron, and Total). The CEO of British Petrol was more concerned about the situation in Venezuela than about the Middle East
After Venezuela was hit by U.S. sanctions, the Venezuelan government announced its intentions to stop selling its oil for U.S. dollars and quickly announced efforts to create a national cryptocurrency.
The U.S. government immediately started protesting against these new developments and they demanded that “democracy to be restored” in Venezuela. U.S. sanctions were first imposed on Venezuela during the Obama administration and more followed under Trump. These sanctions were a response from U.S. administrations to the nationalizations done by the Chavez government. While Obama sanctions mainly targeted officials and other individuals, Trump-era sanctions expanded on those previous sanctions and included not just financial measures, but also allocated U.S. funds to promote the U.S. argument within the Venezuelan society.
That was back in December, last year. In January Maduro called on 10 other Latin American countries, urging them to support the new
Fortunately, this wasn’t any baseless election promise, after the elections, which took place at the end of May, the Maduro government has proceeded to make it a reality.
Back in March Nicolás Maduro stated that “all citizens and companies will be able to purchase ‘petros’ on a specialized website with yuans, rubles, Turkish liras, and euros, as well as with cryptocurrencies such as bitcoin, etherium and NEM.”
Venezuelan President Nicolás Maduro in a recent tweet a few days ago announced that this new Petro cryptocurrency will be a huge part of the economic revival plan of Venezuela, and that the Venezuelan government wants to make Petro coin a legal tender in Venezuela encouraging its use among the population. He also added in the past that “In a short future, Venezuelans can buy in the bakery with the Petro.” Petro is being planned to be used as a unit of account for salaries, goods, and services in Venezuela.
The emergence of the Petro cryptocurrency is an interesting development, and the initiative from the Venezuelan government should be supported and encouraged by cryptocurrency professionals and enthusiasts alike. If Petro manages to replace the Venezuelan Bolivar and somewhat restore the Venezuelan economy, it will undoubtedly serve as solid proof that cryptocurrencies can be used as legal tender in modern society, consequently giving huge amounts of legitimacy to other cryptocurrencies.