Venezuela will issue oil-backed Petro cryptocurrency within days

The Venezuelan government announced that the country’s encrypted currency will be issued within a few days, from 5.3 billion barrels of oil valued at 267 billion US dollars as a support to offset the impact of a serious financial crisis. Venezuela is about to become the first country in the world to issue cryptocurrencies.

Image: earnlite

Venezuelan President Nicolas Maduro announced earlier this month the petro cryptocurrency, backed by Venezuelan oil, gas, gold and diamond reserves. The move surprised many people. Petro is the root of oil in Venezuela’s official language, Spanish. Although cryptocurrency experts are skeptical of this, Venezuela does not have the necessary conditions to do so. However, senior government official Jorge Rodriguez said the first “petro” will be released in a matter of days.

“Battalion 1 in Ayacucho will provide initial support for the cryptocurrency,” Rodriguez told reporters. The Ayacucho block refers to a block of oil located in the Orinoco Belt in southern Venezuela. “It contains 5.342 billion barrels of certified oil, and we’re talking about $ 267 billion in oil to provide support,” Rodriguez said, adding that it makes the difference between petro and other cryptocurrencies, such as bitcoin.

Cryptocurrencies are decentralized and their success depends on transparency, well-defined rules and fair treatment of all participants. Venezuela did not disclose the technical details about petro. The government seems to hope that petro will offset the sharp fall in Venezuelan currency Bolivar and protect the country from the U.S. dollar and the U.S. government. In the black market, Bolivar has depreciated by 97% against the U.S. dollar in the past year. Rodriguez also hopes to make petro part of the payment mechanism to international suppliers. Due to the inability of Venezuela to pay its debts, many international suppliers have stopped supplying the country.

Reference: CNBC