Venezuela launches its "Petro" crypto-currency, backed with oil, on Tuesday

Hannah Rogers
February 20, 2018

Ledezma is no longer considered a key player in Venezuela's fractured opposition, but he had been an iconic Maduro rival when he was under house arrest before fleeing the country.

Hyperinflation has rendered the bolivar, Venezuala's currency, almost worthless.

So they created a new one.

Venezuela, the oil-rich hard cash-strapped South American country, is finally launching the pre-sale of its oil- gold- and diamonds-backed token, the Petro, on Tuesday.

Venezuela's "Petro" crypto-currency will attract investments from Turkey, Qatar, the USA, and Europe, the country's crypto-currency regulator, Carlos Vargas, told reporters. The legislative body argued that the issuance would effectively be borrowing against the country's oil reserves, thus violating laws setting out that congress must approve government borrowing.

There will surely be a lot of investors from Qatar, Turkey, and parts of the Middle East, though Europeans and Americans will also participate, Mr Vargas said last week.

Saying the scheme was "tailor-made for corruption", legislator Jorge Millan said, "This is not a cryptocurrency, this is a forward sale of Venezuelan oil".

Do you think global contributors will invest in Venezuela's Petro?

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Trump "campaigned promoting non-interference in other countries' domestic affairs", Maduro tweeted, tagging the USA president's account. "I am very excited as well as the people of Venezuela", said Maduro.

"With Petro, we are witnessing this opportunism on a much grander scale, and the first of its kind".

The use of computers for bitcoin mining has also taken off, spurred by some of the world's cheapest electricity rates and widespread desperation prompted by a recession deeper than the U.S. Great Depression.

President Nicolas Maduro is hoping the petro will allow the ailing OPEC nation to skirt US sanctions as the bolivar currency plunges to record lows and it struggles with hyperinflation and a collapsing socialist economy.

It has faced world wide criticism though, with the biggest coming from China, who have launched yuan-priced oil futures, and are trying to persuade the top producers to trade crude in its national currency.

Maduro will stand for re-election in April in a ballot opposition leaders plan to boycott.

Secretary of State Rex Tillerson said on a recent trip to Latin America that the United States is considering a ban on Venezuelan oil, the only viable source of income for Maduro's government.

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