Venezuela to Launch $6 billion Backed Petros Amid Backlash From The Congress

Venezuela to Launch $6 billion Backed Petros Amid Backlash From The Congress

After Venezuela’s president Nicolas Maduro declared the soon-to-come emission of 100 million bitcoin-like coins petros, the national virtual money backed by $6 billion petroleum reserves. It was initially anticipated that the formal offering of petro would occur on January 14.

However, a few days later the petro was labeled unlawful by the country’s Congress. Now the emission of petros is questioned. But the Venezuelan Superintendent of cryptos recently assured that petros will be pre-mined and then implemented in a period of up to two months.

The World to See Petros in 6 Weeks?

In accordance with the Venezuelan media outlet El Universal, on January 10 Carlos Vargas, who is the country’s Superintendent of virtual money, notified that the emission of this digital coins will be the subject to the government’s control. Additionally, he emphasized that the state virtual coins of Venezuela won’t be minable. Instead, it will be pre-mined. It will also be appointed to the scheme which reminds of a chaffer.

“The pre-mining means that the developers of the cryptocurrency have decided to distribute a percentage of this currency or all of it among a few people, themselves or among the population of a country,” explained Vargas.

The official added that the disposal of petros will be commenced in approximately six weeks. Therefore, users will get the chance to open their own virtual wallets. Vargas also assured that not only citizens of Venezuela will be able to use the crypto-coin, but people from all over the globe as well.

He said that petro will be supported by an outstanding platform. It will allow people in various countries to purchase the Venezuelan crypto-coins without facing severe restrictions. Vargas promised that petros will be used in “all” exchanges.

The official did not refer to any specific token platform which is already functioning. But, as News.Bitcoin.com reports, the most famous one for creating tokens is called Ethereum ERC20 protocol. This is the platform which demands the pre-mining of digital coins.

Mining Issues

Initially, the president Maduro asserted he had been hiring Venezuelan miners to work on petro. The registry for miners was launched under his supervision and was expected to be closed in the late January. Vargas, in his turn, recently added that it was developed for creating an enregistrement of all those who have mined virtual money.

The official also guaranteed that with the registry citizens should not be afraid of persecution. Important to add that there have been some detentions in the state connected with mining. Although, the reason was the electricity steal. Mining itself is not considered as a criminal activity in the country.

Moreover, Vargas emphasized that it is beneficial to mine in Venezuela due to the fact that its electricity is “the cheapest in the world”. Giving an example, the superintendent mentioned China, where, according to his words, mining of one bitcoin costs $1560, whereas in Venezuela the same activity costs $100-$200.

Oppositionist Congress Stands in the Way

Earlier on January 9, as Reuters conveyed, the country’s Congress, run by the opposition, called Maduro’s crypto initiative an effort to unlawfully pawn Venezuela’s cash-poor oil reserves. Thus, the parliament called the issuance of petros illegal.

“This is not a cryptocurrency, this is a forward sale of Venezuelan oil. It is tailor-made for corruption,” the legislator Jorge Millan claimed.

Meanwhile, crypto specialists say that investors will roughly be interested in piling into petros because of Venezuela’s economic crisis, fueled by maladministration and socialists’ lack of respect for private property rights.

The members of the Congress turned to potential investors with the warning that petro would be worthless. They also said that the emission of such currency violates the constitutional requirements. According to them, the parliament has firstly to approve borrowing.