Venezuela launches Petro cryptocurrency to become first nation to release its own version of Bitcoin.

Can cryptocurrencies overturn the capitalist world order?

Officials say the so-called Petro is backed by Venezuela’s crude oil reserves, the largest in the world.

Socialist President Nicolas Maduro late last year announced he was creating the digital currency to

outmanoeuvre US sanctions preventing cash-strapped Venezuela from issuing new debt.

But the US Treasury Department has thrown a damper on the release, telling American citizens and companies

who buy the petro that they could be violating sanctions.

Many also doubt the government’s commitment to transparency.

Venezuela’s President Nicolas Maduro gestures during a press conference to launch to the market a new oil-backed cryptocurrency called “Petro”, at the Miraflores Presidential Palace in Caracas, on February 20, 2018. Venezuela formally launched its new oil-backed cryptocurrency on Tuesday in an unconventional bid to haul itself out of a deepening economic crisis. The leftist Caracas government put 38.4 million units of the world’s first state-backed digital currency, the Petro, on private pre-sale from the early hours. A total of 100 million Petros will go on sale, with an initial value set at $60, based on the price of a barrel of Venezuelan crude in mid-January. / AFP PHOTO / Federico PARRA (Photo credit should read FEDERICO PARRA/AFP/Getty Images)

 

My advice would be to tread very carefully with this – especially considering the track record of the Venezuelan government,’ said Federico Bond, co-founder of Signatura, a digital currency startup based in Argentina. ‘

They are not in a good position to obtain financing in any other way, so this could be seen as a desperate move,’ he added.

In total,Venezuela plans to issue 100 million digital tokens, starting with a pre-sale of 38.4 million that starts Tuesday and whose reference price is the current cost of a barrel of oil, or around $60. Maduro has also touted the Petro as the fulfilment of the late Hugo Chavez’s dream of upending global capitalism away from the dominance of the dollar and Wall Street.

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‘Petro will be an instrument for Venezuela’s economic stability and financial independence, coupled with an ambitious and global vision for the creation of a freer, more balanced and fairer international financial system,’ the government said in a 22-page white paper, translated into English, outlining its plans.

 

 

 

 

 

 

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