Venezuela gets $735m in first 'petro' cryptocurrency order

Venezuela gets $735m in first 'petro' cryptocurrency order

Troy Powers
February 22, 2018

Though the Petro's value is tied to crude oil, it doesn't actually translate to ownership of any concrete assets.

The powerful Cabello told state television VTV he would make a formal proposal to the Constituent Assembly, which President Nicolas Maduro has used to sideline the opposition and strengthen his grip on power.

Maduro has repeatedly said that his country is the victim of an "economic war" - prompted by financial sanctions imposed by the United States - and that the sale of the new digital currency will help the country circumvent this problem.

"Today, a cryptocurrency is being born that can take on Superman", Maduro announced on Tuesday, referring to the USA as a comic character.

By using a cryptocurrency, Venezuela hopes to attract global investors who would otherwise be blocked from investing in the country by worldwide sanctions, such as those imposed by the Trump administration to curb the country's access to USA debt markets. The U.S. Treasury Department warned in January that investors who buy the cryptocurrency "may be exposed to U.S. sanctions risk". They can't buy it with Venezuela's official currency, the bolivar, which is worth almost nothing because of hyperinflation.

Cryptocurrencies by design are decentralized financial systems, so one created by a government runs contrary to that spirit and creates an opportunity for manipulation, said Leidenz.

Ledezma is no longer considered a key player in Venezuela's fractured opposition, but he had been an iconic Maduro rival when he was under house arrest before fleeing the country.

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Here is what we know about the new currency. "The government has no plans of undertaking structural reform".

The official website for the petro on Tuesday published a guide to setting up a virtual wallet to hold the cryptocurrency.

A pre-sale of the controversial oil-backed cryptocurrency began on Tuesday.

The country's cryptocurrency regulator did not provide further details but, according to Reuters, 38.4% of the petros to be issued will be sold at a 60% discount.

Opposition leaders are already expected to boycott the April presidential poll, because they believe it is rigged to ensure Maduro's re-election despite his unpopularity and a crushing national economic crisis.

He also linked their rise with increasing American aggression on the worldwide stage, and claimed US Secretary of State Rex Tillerson's unfriendly remarks on Venezuela during his recent Latin America tour are a direct outcome of the launch of petro. One document highlights the use of Ethereum network while another document which is now being referred to as the buyer's guide shows the use of NEM blockchain system.