Venezuela has officially launched the pre-sale of its new cryptocurrency Petro, which President Nicolas Maduro hopes would help ease the country’s economic crisis, and circumvent U.S.-led sanctions.
“Petro is born and we are going to have a total success for the welfare of Venezuela,” State-sponsored Telesur television network quoted Maduro as saying Tuesday.
The President added that it will be a “very busy” day since the government will be working on forging strategic alliances.
An official petro whitepaper Maduro unveiled last month said that the government would issue 100 million “oil-backed” Petro units, valued more than $6 billion.
Out of this, 82.4 million will be available for sale between February 20 and March 19. The government has set $60 as the pre-sale price of one petro.
The digital currency’s initial price is based on the approximate cost of a barrel of oil produced in the country in mid-January, and the currency will be backed by the country’s vast oil reserves.
The Petro’s value will be subject to change, corresponding to fluctuations in oil price.
Venezuela, which has the world’s largest proven oil reserves, has allocated five billion barrels of oil to back Petro.
Venezuela’s economy has been reeling under pressure of the US sanctions, falling oil revenue and the plunging value of its currency, the bolivar.
Venezuela’s ability to move money through international banks is limited due to the sanctions.
Carlos Vargas, who will manage the government’s cryptocurrency, said the pre-sale and initial offer will be made in hard currencies and cryptocurrencies, but not in bolivars. “The Petro could be sold in exchange for local currency after the initial sale”.
Cryptocurrency experts are skeptic about the success of Petro.
CNBC quoted Harry Colvin, director and senior economist at Longview Economics, as saying, “there will be trust and transparency issues.”
Petro would probably be made illegal if Maduro loses the election in April or is forced out of power, according to him.
The Opposition-controlled Venezuelan National Assembly had declared the petro illegitimate and said it cannot be backed by oil, but the Constitutional Assembly stripped the National Assembly of its legislative powers.