State Cryptocurrency ‘Petro’ is Illegal, Declares Venezuela’s Congress

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Venezuela’s parliament, notably run by the opposition, has outlawed President Nicolas Maduro’s much-vaulted oil-backed national cryptocurrency, the petro.

It was December when controversial Venezuelan president Nicolás Maduro first unveiled plans for a national cryptocurrency, dubbed the petro, backed by the country’s massive oil reserves. Venezuela has the world’s largest oil reserves for any single country. The petro, Maduro said at the time, would also be backed by other commodities like gold and diamonds alongside oil. The petro would be useful to combat economic sanctions due to a ‘US-led blockade’, the Venezuelan president claimed, helping the country regain access to global commerce.

Just days ago, Maduro announced the issuance of 100 million petros, wherein each digital token will be directly valued to and backed by a single Venezuelan oil barrel. At effectively $6 billion in current prices, the issuance will come in the days following Maduro’s other announcement – the petro’s first national meeting of miners planned on January 14.

Having panned the endeavor ever since its announcement, Maduro’s political opposition have now turned up their scrutiny of the petro by declaring it to be “a forward sale” of the country’s oil rather than a cryptocurrency.

In the Venezuelan capital of Caracas, the country’s opposition-run parliament on Tuesday claimed that any issue of the petro would violate constitutional requirements that mandates the legislature approve any borrowing against the country’s oil wealth. Legislators called the petro ‘an effort to illegally mortgage” Venezuela’s oil reserves.

As reported by Reuters, legislator Jorge Milan stated:

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

In a series of tweets, Milan summed up the petro as “illegal and unconstitutional”. Those “who invest in that illegal cryptocurrency should consider that when the country recovers, that money will not be used to solve the hunger of Venezuelans,” he added.

In another translated tweet, the legislator added:

“This is a new fraud disguised as solutions to the crisis. Here the only novelty is that this inefficient Government wants to compensate the lack of production with these virtual barrels, generating new and illegal debt.”

“Petro is a way of trying to cover the damage they did to the Venezuelan oil industry,” he added, before revealing that Venezuela owes oil to India and China while production has dropped in recent times.

Featured image from Shutterstock.

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Samburaj is the Editor for CCN, among the earliest and foremost publications covering blockchain, cryptocurrency and financial technology news. He has authored over 1,500 articles for CCN and is invested in Bitcoin. Email: [email protected]