Venezuela has released a cryptocurrency Petro

Venezuela is experiencing one of the worst in recent decades crises – hyperinflation, shortages of food and medicines.

Venezuela, the fourth consecutive year ranked first in the rating “the most miserable economies” of the world, has released the world’s first national cryptocurrency Petro.

Petro provided for reserves of Venezuelan natural resources – gold, oil and diamonds, said in a whitepaper of the project.

In the words of President Nicolas Maduro, the amount of pre-sales national cryptocurrency of Venezuela stood at 735 million dollars.

Корреспондент.net understood why Venezuela has launched its own cryptocurrency.


Petro on Ethereum and oil

Petro is built on the blockchain-Ethereum platform, standard ERC20, the document says the government of Venezuela. Also there are instructions for buyers Petro: so the transactions were possible, you need to have a special digital wallet .

“As soon as the wallet is opened, it will generate the email address which you can share with anyone who wants to transfer a PTR to your wallet,” reads the project website.

The launch of the Petro consists of two stages: the first, which started on 20 February, the elite circle of investors proposed to 38.4 million tokens at great discount prices. Just Caracas produces 100 million.

In the second phase, which will begin on March 20, another 44 million tokens will be placed in the course of the ICO (initial placement of coins). The remaining 17.6 million tokens will be deducted by Management for cryptocurrency Venezuela.

During the private placement and the subsequent ICO to acquire tokens will be available only for hard currency or existing cryptocurrencies, but not for Venezuelan bolivars. In the secondary market Petro can be bought and sold for bolivars.

The official currency of Venezuela now cost next to nothing over the last two years, it has lost 99 percent of its value. One worth $ 233 thousand bolivars.

Computer for mining crypto-currencies Petro / EPA

Interest in Petro expressed in Qatar, Brazil, Denmark, Norway, Poland, Honduras, Vietnam, and Turkey, media reported.

In a recently published whitepaper draft States that “provided oil and other minerals” cryptocurrency Petro will be accepted as means of payment for taxes, fines, deposits, and utilities.

Price Petro is bound to the quoted prices of Venezuelan oil, one barrel of which is currently trading at just around $ 60. 100 million tokens are “backed” five billion barrels of crude oil.

Maduro ordered the oil company, PDVSA, petrochemical Petroquimica de Venezuela (Pequiven) and the Corporation CVG, which is engaged in the development of mineral resources, to commit part of the transaction of purchase and sale with the use of Petro.

He also ordered to allow the cryptocurrency to pay visa fees of the embassies of Venezuela around the world.

In addition, in response to the request of the National air carriers Association, he was allowed to pay kritovoulos and fuel for aircraft, and also approved the right of hotels and other tourist facilities of Venezuela to accept payment for their services in Petro.


Questions to Petro

Petro, despite the fact that it is not based blockchain technology (distributed database), different from existing in the world of cryptocurrency.

The main feature of cryptocurrency is decentralization, and in the case of Petro there is a center, which fully controls the issue and circulation of token.

Senior economist at Longview Economics, said Harry Colvin told CNBC that Venezuela, as the Issuer is in serious doubt, because the Venezuelan government, “aware of the embezzlement of the property, and the Central Bank provoked hyperinflation.”

“There may be issues related to trust and transparency,” – said the expert.

Unlike the usual crypto-currencies, Petro, according to Venezuelan authorities, provided raw materials of the country.

However, the Venezuelan authorities do not explain what means “security” of oil resources, and in the core document, published on 31 January, there is no mention of the possibility of exchange of tokens for raw materials.

Experts note that oil prospects will only get cheaper.


The crisis of Venezuela’s economy

Venezuela is experiencing one of the worst in recent decades crises. Last year, Maduro repeatedly increased the minimum zarpaltu, but it’s not enough to cover even the basic needs of people.

Venezuela is extremely import-dependent, and the purchase of food and other commodities do not have enough currency. Medical supplies decreased five times.

The country has multiple exchange rates: official (which currency to buy it), the black market rate and the real exchange rate, which depends on the volume of transactions and can fluctuate dramatically.

About 40 percent of Venezuelans now eat three times a day, many twice or even only once. A lot of Venezuelans eat out of garbage cans.

McNerney disaster Venezuela / Getty

Due to the growth of inflation in the country (according to some estimates, since the beginning of the year it amounted to over four thousand percent) in early November in Venezuela in turn introduced the banknote in 100 thousand bolivars (about $ 2.5).

Cash at ATM machines in Venezuela, under the new laws a day, you can withdraw up to ten thousand bolivars, which is barely enough for a few cups of coffee.

According to the latest forecasts of the International monetary Fund, in 2017, the rise in consumer prices in Venezuela is expected to reach 652,7 percent, and in 2018 already 2349,3 percent.

According to estimates by the Economic Commission for Latin America and the Caribbean, in the past year the volume of external debt of Venezuela has reached 132,15 billion dollars.

The country is already behind on several payments on external debt. International rating Agency Standard&Poor’s in November lowered the rating of Venezuela to default because of the failure of the country of its debt obligations.

The attack on the global financial system

Maduro announced that this cryptocurrency Petro aims to overcome financial blockade the United States imposed against Venezuela financial sanctions, effectively isolating its power from the dollar system.

However, the American Ministry of Finance has determined that investments of US citizens in the Venezuelan oil is a cryptocurrency will break the sanctions regime.

The launch of cryptocurrency can also be an attempt to overcome hyperinflation or propaganda (the government struggles with economic problems), since April of this year elections the President of Venezuela, experts say.

The global financial system dominated by the West, makes bitcoin very attractive to non-Western countries and of outlaw regimes, says Bloomberg columnist Leonid Bershidsky.

“The West will soon have to decide whether to regulate bitcoin, gradually depriving it of the right to exist, or got involved in a General fight, risking to lose his financial superiority,” writes Bershidsky.

The cryptocurrency provides some anonymity to investors. They will be able to give Venezuela borrow money and repay these debts in bitcoin. Maduro wants these investors spend their money on Venezuelan oil and other commodities.

Experts point out that the cryptocurrency’s anonymity will attract those who are trying to launder money and owns a secret state

Even those who do not face sanctions, the creation of its own cryptocurrency will help to overcome the Western dominance, and they will refuse to act according to the rules set by Washington, Frankfurt and London, at least when these rules seem to them burdensome.

“The world order we have known it is changing right before our eyes. Disruptive technology which is bitcoin, in the end really undermines the status quo… America needs to adapt to the changing reality and to immediately release your cryptodira, because otherwise this country will be on the sidelines,” writes the expert.

To maintain its dominant role in the global financial system, the West is in fact interested in deterring progress. And it gives non-Western countries, including rogue States, serious technological advantages, generated a powerful incentive.


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