Venezuela Comes Out With Guides On Petro Digital Currency

Venezuelan presidential candidate Javier Bertucci acknowledges supporters in Caracas Venezuela Wednesday Feb. 21 2018. With two months to go befo

"Today, a cryptocurrency is being born that can take on Superman", said Maduro said in a televised launch event Tuesday night, using the comic character to refer to the United States.

The country's currency bolivar has recently dropped to record lows.

The coin appears to be essentially a forward sale of the country's oil dressed up as a crypto-currency, opposition lawmaker Jorge Millan says.

"The new cryptocurrency will be backed by reserves of Venezuelan wealth in gold, oil, gas, and diamonds".

The Venezuelan leader said he expects the Petro to open "new avenues of financing" in the face of Washington's sanctions, which prohibit U.S. citizens and companies from trading debt issued by the country and its oil company PDVSA. "The largest and most important companies and blockchain in the world are with Venezuela, we are going to sign agreements". The government will distribute the remaining 18% to the Superintendency of Currency and Related Activities.

Meanwhile, consulting firm Eurasia Group estimates that although Venezuela could raise some $2bn in the initial offer, it is "unlikely" that the Petro will be established as "a credible means of exchange", beyond short term "interest".

The decision to hold the vote in April - and not December, when it's traditionally held - caught the opposition off guard, without time to hold primaries or unite behind a single candidate. But the opposition-controlled legislature has declared the petro illegal, meaning it may well refuse to honor the coin once current leaders eventually depart.

Venezuelan presidential candidate Javier Bertucci leaves with his wife Rebeca after he spoke to the press in Caracas Venezuela Wednesday Feb. 21
Venezuelan presidential candidate Javier Bertucci leaves with his wife Rebeca after he spoke to the press in Caracas Venezuela Wednesday Feb. 21

Maduro said Venezuela is the victim of an "economic war" led by opposition politicians with the help of the government of US President Donald Trump.

Squinting the eyes and suspending disbelief might just make the petro look like a decent investment to some.

It is struggling to restructure its external debt, estimated at around $150bn by some experts. Overall, though, more than a little nose-holding may be required.

The leftist Caracas government put 38.4 million units of the world's first state-backed digital currency, the Petro, on private pre-sale from the early hours. The Venezuelan president, however, did not give details about the initial investors and there was no evidence presented for his figure. He added that tourism, some gasoline sales, and some oil transactions could be made in petro.

- Swiss financial watchdog FINMA said on February 21 that it is investigating several Swiss banks over whether they followed anti-money laundering rules amid a widening $1 billion graft probe involving Venezuela's state oil company.

The petro is not likely to attract significant investment, according to blockchain experts. A US federal indictment this month accused five former Venezuelan officials of soliciting bribes to help vendors win favorable treatment from Petroleos de Venezuela and then stashing the money in banks, including in Switzerland.

Government white paper on petro Spanish (graphic).

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