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Petro Discount: Venezuela is Luring Qatar to Invest in State Cryptocurrency

Last Updated April 27, 2023 9:28 AM
Samburaj Das
Last Updated April 27, 2023 9:28 AM

A delegation of officials from Venezuela’s government is reportedly pitching the country’s upcoming cryptocurrency petro in Qatar in an attempt to gain the latter as an early investor.

Citing source with knowledge of the diplomatic meetings, Bloomberg is reporting that a group of Venezuelan officials led by ‘crypto superintendent’ Carlos Vargas is currently in Qatar, hoping to land the oil-rich Middle Eastern state as an early investor. The delegation is luring Qatar by ‘currently negotiating discounts’ ahead of the oil-backed cryptocurrency’s upcoming ‘sale’ in February, the report added.

It’s notable that Venezuela is reaching out to Qatar to buy into its cryptocurrency. Qatar is facing its own economic blockade by a Saudi-led coalition since mid-2016 and has been making friends elsewhere by purchasing Airbus commercial planes  from France ($6.35 billion), warships  from Italy ($5..91 billion), 24 Typhoon fighter jets  from the UK ($8 billion) and a $12 billion deal with the US for 72 F-15 fighter jets .

The Pre-Sale

A month-long ‘private pre-sale” will begin on February 15, where government officials expect to raise as much as $1.3 billion, before the sale extends to individuals. Venezuela’s government also intends to pay public workers in the digital token before encouraging them to use the cryptocurrency with tax benefits.

As reported in December, controversial Venezuelan president Nicolás Maduro first announced the state cryptocurrency as a solution to circumvent economic sanctions imposed by the United States’ presidential administration. The sanctions have proved a crippling blockade, cutting Venezuela’s access to global finance and international banking. Petro will be primarily backed by oil, Maduro said, alongside other commodities in gold and diamonds.

On January 9, Maduro doubled down on the plan to launch the petro by announcing the upcoming issuance of 100 million petros – some of which is currently being offered on a discount to Qatar. Each petro will be backed by an oil barrel in Venezuela’s reserves, valuing the first issuance of the petro at approximately $6 billion.

The following day, the opposition-run Venezuelan congress outlawed Maduro’s petro as an “illegal and unconstitutional” instrument that was effectively “an effort to illegally mortgage” Venezuela’s oil reserves.

The Venezuelan Parliament’s legislator Jorge Milan said:

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

Featured image from Shutterstock.