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Venezuela Set To Launch The Petro, Its New Cryptocurrency

21 February 2018

Whether the country's leaders are oblivious to these warnings, or simply do not care, the sale is moving forward.

Carlos Vargas, Venezuela's cryptocurrency superintendent, revealed recently that the country was preparing to set out its plans to launch the petro, with the first sale scheduled for today.

Its dire economic situation has not been helped by financial sanctions imposed by Washington past year, leading to a dash for cash that critics say is the real driving force behind the launch of the petro.

According to reports, the Petro token is making great efforts to resist the economic disaster in the country, which it has been experiencing for a while, resulting in hyperinflation. According to the International Monetary Fund, this year hyperinflation could hit 2300%.

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Maduro and senior government officials, including Attorney General Tarek William Saab, have alleged that the United States is orchestrating an alleged plan for a "military invasion" of Venezuela from neighbouring Colombia. The president announced the revolutionary decision - the launch of commodity-linked cryptocurrency.

However, petro's success could bring about another round of regulatory crackdowns on digital currencies.

Creating stable digital currencies with staying power requires trust and transparency, they contend - qualities that they say are notably absent in the Maduro government.

"In terms of global investors, there are huge risks because these are barrels [of oil] that are not being developed, at all", Caracas analyst Jean Paul Leidenz tells Otis. What's more, it is to be extracted through joint ventures in which the government holds only a 60% stake.

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The sanctions - levied past year by Washington - block USA banks and investors from acquiring newly issued Venezuelan debt, effectively preventing the country from borrowing overseas to bring in new hard currency or refinance existing debt.

Specifically, the U.S. Treasury Department warned in January that Venezuela's proposed petro cryptocurrency could violate sanctions. The dollar enables American governments to exert enormous force and influence without having to fire a missile or write a line of malicious computer code, and getting out from under the dollar has always been a dream for these countries. It has opened a registry for so-called "miners" who will be able to earn petros through a process of auditing online cyrptocurrency transactions.

The future of Petro can hardly be predicted. Diosdado Cabello, the PSUVs perpetual number two man, made the request for early legislative elections April 22nd, the same day as the divisive Presidential vote.

President Maduro has said that each coin will be backed by one barrel of the state's petroleum reserve.

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Meanwhile, the government will reserve the remaining 17.6 million Petros.

Venezuela Set To Launch The Petro, Its New Cryptocurrency