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petro (token)

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petro
Petro logo
Denominations
PluralPetros
CodePTR
Subunits
 1⁄100000000Mene
Development
Original author(s)Ministerio del Poder Popular para la Educación Universitaria, Ciencia y Tecnología
White paperPetro White Paper
Initial release3 December 2017 (6 years ago) (2017-12-03)
Ledger
Block explorerregistro.blockchain.gob.ve/web
Website
Websiteelpetro.gob.ve

The petro, or petromoneda,[1] launched in February 2018, is a cryptocurrency developed by the government of Venezuela.[2][3] Announced in December 2017, it is claimed to be backed by the country's oil and mineral reserves, and it is intended to supplement Venezuela's plummeting bolívar fuerte currency, purportedly as a means of circumventing U.S. sanctions and accessing international financing. Petros will be "pre-mined", meaning that new tokens cannot be created after the issuance, and are likely to be a token on the Ethereum network.[4]

History

Venezuelan President Nicolás Maduro announced the petro in a televised address on 3 December 2017, stating that it would be backed by Venezuela's reserves of oil, gasoline, gold, and diamonds.[5][6]

Maduro stated that the petro would allow Venezuela to "advance in issues of monetary sovereignty",[7] and that it would make "new forms of international financing" available to the country.[5] Opposition leaders, however, expressed doubt due to Venezuela's economic turmoil,[6] pointing to the falling value of the Venezuelan bolívar, its fiat currency, and $140 billion in foreign debt.[8]

On January 5, 2018, Maduro announced that Venezuela would issue 100 million tokens of the petro,[9] which would put the value of the entire issuance at just over $6 billion.[10] It also established a cryptocurrency government advisory group called VIBE to act as "an institutional, political and legal base" from which to launch the petro.[1] Carlos Vargas is the "Superintendent of Cryptocurrencies".[4]

In a document leaked to and reviewed by Reuters, VIBE recommended that the government sell $2.3 billion worth of petros in a private offering at a discount of up to 60%, indicating that "Maduro’s valuation of the nascent petro faces significant market skepticism", followed by $2.7 billion worth of petros offered to the public a month later, with the remainder "shared between the government and VIBE". It also suggested that the government accept tax payments in petros as well as allow PDVSA, the country's state-owned oil company, incorporate cryptocurrencies in its dealings with foreign companies.[11]

The petro’s pre-sale started on Feb. 20 at -04:00 UTC and ends at Mar. 19 at -04:00 UTC.[12][13][3] 38.4 million tokens were made available.[citation needed]

Response

In response, Venezuela’s National Assembly, run by the opposition Democratic Unity Roundtable, declared the petro to be an illegal debt issuance by a government desperate for cash, and has said it will not recognize it.[11]

In the United States, the Department of the Treasury warned that participating in Venezuela's proposed initial coin offering for the petro cryptocurrency could violate U.S. sanctions against Venezuela, because it "would appear to be an extension of credit to the Venezuelan government".[11]

The cryptocurrency community's response was mixed yet generally negative. Financial journalist Max Keiser expressed his support in light of the country's hyperinflation,[14] while economist Jean Paul Leidenz expressed concerns that the creation of the petro would encourage further hyperinflation.[1] Forbes's Steve Hanke stated that the petro was likely to wind up "in the graveyard".[15] Other analysts point to its government control or centralisation as its greatest weakness.Cite error: The <ref> tag has too many names (see the help page).

References

  1. ^ a b c Chappell, Bill (4 December 2017). "Venezuela Will Create New 'Petro' Cryptocurrency, President Maduro Says". National Public Radio. Retrieved 2017-12-05.
  2. ^ Cryptocurrencies as Asset-Backed Instruments: The Venezuelan Petro. Banking and Insurance eJournal. Social Science Research Network (SSRN). Accessed 18 February 2018.
  3. ^ a b (20 February 2018). Venezuela launches the ‘petro,’ its cryptocurrency. Retrieved 3 March 2018.
  4. ^ a b Helms, Kevin (17 January 2018). "Venezuela Considers Selling Its "Oil-Backed" Cryptocurrency With a 60% Discount". Bitcoin News. Retrieved 8 February 2018.
  5. ^ a b "Venezuela Plans a Cryptocurrency, Maduro Says". The New York Times. 3 December 2017. Retrieved 2017-12-03.
  6. ^ a b Ulmer, Alexandra; Deisy Buitrago (3 December 2017). "Enter the 'petro': Venezuela to launch oil-backed cryptocurrency". Reuters. Retrieved 2017-12-03.
  7. ^ "Monetary Sovereignty: International Political Economy: Monetary Relations eJournal", Cryptoanarchism and Cryptocurrencies. Social Science Research Network (SSRN). Date accessed 23 January 2018.
  8. ^ "Venezuela unveils virtual currency amid economic crisis". BBC. 3 December 2017. Retrieved 2017-12-03.
  9. ^ Gupta, Girish (5 January 2018). "Maduro says Venezuela will issue $5.9 billion in oil-backed cryptocurrency". Reuters. Retrieved 8 February 2018.
  10. ^ "Venezuela Parliament Calls President's $5.9 bln Petro Cryptocurrency 'New Fraud'". Cointelegraph. 10 January 2018.
  11. ^ a b c Wroughton, Lesley (16 January 2018). "U.S. warns investors over Venezuela's 'petro' cryptocurrency". Reuters. Retrieved 8 February 2018.
  12. ^ "Venezuela's Cryptocurrency Petro Finds Foreign Investors, ICO To Take Place In March". Cointelegraph. 8 February 2018.
  13. ^ Gallas, Daniel (January 30, 2018). "Venezuela presses ahead with Petro". BBC. Archived from the original (html) on February 20, 2018. Retrieved February 20, 2018. Venezuela is to start selling its cryptocurrency "Petro" next month. In a meeting with cabinet ministers, President Nicolas Maduro (above) said it will launch the currency on 20 February.
  14. ^ Adams, Colin (14 December 2017). "Meet the "Petro", Venezuela's New "Cryptocurrency"". Invest in Blockchain. Retrieved 8 February 2018.
  15. ^ Hanke, Steve (6 December 2017). "Maduro's 'Petro' Cryptocurrency Will Join Chavez's Bolívar Fuerte, In The Graveyard". Forbes. New York. Retrieved 2017-12-11.
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