Venezuela launches oil-backed cryptocurrency to escape economic turmoil
- 6 years ago
With crushing debt and a starving population, the government in Venezuela has launched pre-sales of what it says is the world's first sovereign cryptocurrency.
It's probably never going to reach Bitcoin levels,... but the socialist country hopes it brings in some much needed funds.
Ro Aram has the details.
The 'petro' is an unusual solution to Venezuela's ailing economy, which is facing hyperinflation and the collapse of its currency, the bolivar.
Caracas is also hoping it will help the country evade U.S. sanctions.
Washington levied them last year to block American banks and investors from acquiring newly issued Venezuelan debt, effectively preventing the nation from borrowing abroad to bring in new hard currency or refinance existing debt.
In a white paper, Caracas said it will release 100 million petro coins during the first year, with the initial 38.4 million going on sale on Tuesday at a value of roughly 60 U.S. dollars per token.
According to the government, each token is being pegged to the price of one barrel of Venezuelan oil.
President Nicolas Maduro made a boisterous claim of raising 735 million U.S. dollars in the first day of trading, painting a rosy picture for the new cryptocurrency.
"Having managed to reach 735 million dollars in 20 hours, says that we are doing well, we start well, and above all, Venezuela must know and the world must know, that we have signed two fundamental agreements so that the petro circulates through the most advanced technological platforms of the world."
Venezuelan officials, however, have released few details of how the petro will work, and the president failed to provide sufficient evidence on how the 735 million dollars was raised.
Economists also remain skeptical, questioning the petro's credibility.
Furthermore, the country's opposition-controlled congress has declared the digital currency illegal and the U.S. Treasury Department has warned American investors that accepting it might violate international sanctions that have been imposed on Venezuela.
Ro Aram, Arirang News.
It's probably never going to reach Bitcoin levels,... but the socialist country hopes it brings in some much needed funds.
Ro Aram has the details.
The 'petro' is an unusual solution to Venezuela's ailing economy, which is facing hyperinflation and the collapse of its currency, the bolivar.
Caracas is also hoping it will help the country evade U.S. sanctions.
Washington levied them last year to block American banks and investors from acquiring newly issued Venezuelan debt, effectively preventing the nation from borrowing abroad to bring in new hard currency or refinance existing debt.
In a white paper, Caracas said it will release 100 million petro coins during the first year, with the initial 38.4 million going on sale on Tuesday at a value of roughly 60 U.S. dollars per token.
According to the government, each token is being pegged to the price of one barrel of Venezuelan oil.
President Nicolas Maduro made a boisterous claim of raising 735 million U.S. dollars in the first day of trading, painting a rosy picture for the new cryptocurrency.
"Having managed to reach 735 million dollars in 20 hours, says that we are doing well, we start well, and above all, Venezuela must know and the world must know, that we have signed two fundamental agreements so that the petro circulates through the most advanced technological platforms of the world."
Venezuelan officials, however, have released few details of how the petro will work, and the president failed to provide sufficient evidence on how the 735 million dollars was raised.
Economists also remain skeptical, questioning the petro's credibility.
Furthermore, the country's opposition-controlled congress has declared the digital currency illegal and the U.S. Treasury Department has warned American investors that accepting it might violate international sanctions that have been imposed on Venezuela.
Ro Aram, Arirang News.