A senior Russian official has confirmed that Venezuela’s debt to Russia, a total of $3.15 billion owed to the Kremlin over a 10-year period, will not be repaid in any part with Venezuelan state cryptocurrency petro.
Konstantin Vyshkovsky, chief of the Russian finance ministry’s state debt department, told reporters on Tuesday that Venezuela has not offered to pay part of the debt owed to Russia with its oil-backed state crypto petro. According to Reuters, Venezuela’s restructured debt repayment deal – signed last year – sees the South American country pledge to make “minimal” repayments to the Kremlin over the next six years toward ultimately paying back a total of $3.15 billion over a decade.
Trumpeted by Venezuelan President Nicolas Maduro, the petro was launched in February as the world’s first-ever official state cryptocurrency. Backed by Venezuela’s oil reserves wherein the value of a barrel of oil is directly pegged to the value of a single petro token, the cryptocurrency was launched as a means to evade sanctions enforced by the United States.
The Russian official’s revelation comes soon after a dramatic report from Time Magazine that pointed to ties between Russia and Venezuela in the development of the latter’s cryptocurrency. Russian President Vladimir Putin was briefed on the effort and personally “signed off on it last year” the report claimed, pointing to Denis Druzhkov and Fyodor Bogorodsky as the two key Russians involved as Maduro’s advisers on the petro.
The report, incidentally, was published within a day of US President Donald Trump issuing the first-of-its-kind executive order barring American citizens and residents from trading or acquiring the petro.
However, the Kremlin quickly dismissed the Time Magazine report as ‘fake news’ and a “blatant lie”.
Although admitting to being privy to Venezuela’s cryptocurrency project, Russia’s deputy director of Information and Press Department of the Russian Foreign Ministry Artyom Kozhin said there was “no way” that Russian financial authorities every participated in the project.
“During the course of the meeting held on February 21, 2018 in Moscow, Venezuela’s Minister of Economy and Finance Mr. [Simon] Zerpa indeed handed over a booklet on the cryptocurrency to the Russian Finance Minister exclusively for the purpose of informing Russian partners about this project”, the official stated over the weekend. “None of the parties mentioned, discussed or reviewed the topic of cryptocurrency use in Russian-Venezuelan cooperation.”
Building upon claims to have raised $735 million on its first day of launch, Venezuelan president Maduro recently said the still ongoing token sale has raised over $5 billion to date. The numbers, however, do not add up.
Kremlin image from Shutterstock.