Petro: Venezuela’s New Cryptocurrency, How It Operates and Why, Explained.

The Venezuelan government has been working on an oil-backed state cryptocurrency named Petro. This new project will allow the Venezuelan government to sell their oil in exchange for their Petro cryptocurrency and bypass the sanctions imposed by the US at the same time.

The president of Venezuela, Nicolás Maduro said that the goal of the project is embracing new forms of payment through cryptocurrencies and at the same time, reducing the reliance on the US dollar. Maduro said (after a rough translation):

“In 2019 we are scheduled to sell crude oil for Petro and in this way continue to free us from a currency that the elite of Washington uses.”

Maduro also stated:

“It is necessary to promote a balanced, fair and diverse monetary system, in which the dollar enters as an exchange currency, but which is not used as a political mechanism.”

According to a tweet made by the official twitter account of Petro, Petro will be purchased either from the country’s treasury via the coin’s official or from six other crypto exchanges which are authorized by the Venezuelan government, Ancar, Amberes Coin, Afx Trade, Cave Blockchain, Cryptia, and Criptolago. You can buy the coin with Ethereum (ETH), Litecoin (LTC), Bitcoin (BTC) and Dash (DASH). However, among those cryptocurrencies, it is only available with Bitcoin (BTC and Ethereum (ETH) currently.

Maduro mentioned in his speech on Oct. 1 that the state coin will be backed by oil. Furthermore, Petro’s brand new white paper states that the Petro is backed 20 percent by gold, 20 percent by iron, 10 percent by diamond and 50 percent by oil.

Back in August of 2018, a report by Reuters published claimed there was no sign of Petro existence in Venezuela, while the “Wired” magazine called the Venezuelan Petro “a stunt” that aims to cover up the Venezuelan government’s failure to recover from the inflation.

Citations:

Berman, A. (2019, January 19). Venezuela Officially Launches Sale of Controversial Petro Coin for Fiat, Crypto. https://cointelegraph.com/news/venezuela-officially-launches-sale-of-controversial-petro-coin-for-fiat-crypto

Bitcoin | BTC. (2018, February 19). https://www.cryptomoneytimes.com/bitcoin-btc/

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Petro: Venezuela’s New Cryptocurrency, How It Operates and Why, Explained. was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.