$6 Billion Oil-Backed Cryptocurrency: Venezuela’s President Orders Issue of 100 Million Petros

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Venezuelan president Nicolás Maduro has announced the issuance of 100 million petros, the state’s proposed upcoming national cryptocurrency backed by its oil reserves, the world’s largest by any country.

Venezuela’s national cryptocurrency, the petro, will soon see its first issuance after Maduro’s mandate to issue 100 million units of the digital tokens. Each petro will be directly valued to a single barrel of oil, reports the El Nuevo Herald. At an average of just under $60 per barrel at the time of his announcement, the total value of 100 million petros would be just under $6 billion.

In a state television address, Maduro stated:

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.

Following his announcement last week, Venezuela’s first ever national meeting of petro ‘miners’ will convene on January 14, a date when the petro is formally presented. The issuance of the 100 million petros will take place via ‘virtual currency exchange houses that are currently in a trial period’ according to the report.

As reported by CCN in December, Maduro first announced the cryptocurrency as a means to evade and circumvent economic sanctions and the “financial blockade” imposed by the U.S. president Trump’s administration. In August, the US government enforced crippling financial sanctions that have proved a blockade in Venezuela’s access to international banks and global finance.

The petro will also be backed by other commodity reserves like gold and diamonds, Maduro added. The announcement by the Venezuelan leader was met with criticism by his political opponents who dismissed the endeavor as a fanciful idea at a time when Venezuela continues to suffer hyperinflation amid severe food shortages and a deepening economic recession.

That hasn’t stopped Maduro from bullishly announcing the superintendence of the petro in the days before Christmas 2017 by setting up a sperate body to ‘govern’ the cryptocurrency and its transactions.

Featured image from Shutterstock.

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