Venezuela Emits $6 Billion Worth National “Bitcoins” Amid Backlash

Venezuela Emits $6 Billion Worth National “Bitcoins” Amid Backlash

Venezuela is taking on a leading position among the countries, which look forward to adopting cryptocurrencies on the greater level, creating national digital coins. On Friday, January 5 the country’s President Nicolás Maduro ultimately notified about the emission of 100 million petros, supported by oil, worth of $6 billion in total.

Officially, the forthcoming national cryptocurrency of Venezuela is anticipated to be presented just in a few days – on January 14 – as El Nuevo Herald reported.

Venezuela to Present Own Digital “Gold”

The rumors over the development of Venezuela’s state digital currency have been going on for months, but in December Maduro publicly promised to launch “el petro” the state’s digital coin, in order to withstand the so-called economic “blockade” by the government of the current US President Donald Trump (such a term, naming the US policy towards Venezuela, has been implemented by Maduro himself).

In August 2017 the US authorities imposed strain financial restrictions on Venezuela, limiting country’s approach to banks worldwide and the finance on the whole.

Maduro’s vision concerning the petro has also been connected to the financial and social growth of Venezuela, as it would let the country move forward to the new types of transborder financing. It is known that the country has been living through the severe socioeconomic crisis since 2012.

By the end of 2017 Maduro even demonstrated on national TV a decree which revealed the mining plan and the controlling issues over the petro.

Well-Backed With Oil

Since December it has been known that Venezuela would emit 100 million of petros, sustained by its oil reserves. And it seems that soon these plans will come true. For example, each state digital coin will be supported by a barrel of petroleum. At the time of the announcement, each barrel cost approximately $60. It means that in general 100 million petros will be sustained by the “black gold” reserves, worth around $6 billion.

Amid the announcement on the national TV on January 5, Maduro claimed:

“I have ordered the emission of 100 million petros with the legal sustenance of Venezuela’s certified and legalized oil wealth. Every petro will be equal in value to Venezuela’s oil barrel.”

Besides oil reserves, petros will also be supported by such goods as diamonds and such ore as gold, just as it was emphasized in the decree previously.

Officially, the petro will be presented on Sunday, January 14. On that day there is expected to be organized the first historic appointment of petro miners in Venezuela. The issuance of all the petros will be conducted via exchanges, which function virtually and currently are being tested.

Backlash

According to The Guardian, Maduro’s political adversaries didn’t like the idea of the launch of the state digital “gold”, especially at the moment when Venezuela is experiencing the extreme inflation, grave nutrition, and medicine deficit. They believe that, firstly, the issuance needs congressional approval.

Therefore, the recent news concerning petros was met with scorn and the whole Maduro’s idea has been treated like an erratic one. However, the backlash didn’t stop Maduro from establishing a separate body to regulate petro and its operations by the end of 2017.