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Venezuela Comes Out With Guides On Petro Digital Currency

Venezuela's currency is the world's first government cryptocurrency.

Perhaps unsurprisingly, members of the country's National Assembly - which is controlled by political parties in opposition to Maduro - have blasted the move, including in statements issued just hours after Tuesday's broadcast event. It has hit the country hard since oil accounts for 96 percent of its exports.

"Within the framework of policies to strengthen monetary sovereignty and promote welfare by bringing power closer to its citizens, the government of the Bolivarian Republic of Venezuela has made a decision to embark on an ambitious project for the future, with the vision of turning the country into a blockchain-based solutions development hub for emerging economies", the site noted. Venezuela and its state-owned oil company are now in default on about US$1.7 billion in debt payments.

Amid the country's rising economic crisis which has led to hyperinflation and a worthless national currency, the government is issuing the Petro in an effort to bolster the economy.

Venezuelan's major opposition groups edged closer Tuesday to an all-out boycott of an upcoming presidential election, warning the vote won't be free or fair. During his address, Maduro stated that the first operations will be carried out via a private sale. The tokens are each created to be valued at and backed by a barrel of Venezuelan crude oil.

The initial offering begins on March 20, and is open to the public. The government will distribute the remaining 18% to the Superintendency of Currency and Related Activities. Europe's sanctions are against Venezuelan government officials. However, the digital coins are not redeemable for barrels of crude oil.

Theoretically, the whole value of the issuance, at current oil prices, would be about US$6 billion, but with discounts it might end up raising a couple billion, give or take, for the government. "We are in the technological and economic vanguard to overcome the speculation of global currencies that affect the lives of Venezuelans". The news were revealed on Twitter, where he mentioned that it had raised more than CNY 4.777 million ($735 million).

In a letter to the treasury secretary, Florida Senator Marco Rubio and New Jersey Senator Robert Menendez wrote: "We have serious doubts about whether Venezuela has the capacity to launch a cryptocurrency..."

"[The] petro is a fraudulent, illegal and invalid mechanism for the government to continue its shady business and money laundering, because it is not known where those resources will come from", he wrote.

With (rigged) elections slated for April (spoiler alert: Maduro will win), it doesn't look like much is set to change for Venezuela, its citizens or its creditors. But it already is, isn't it?

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