Venezuela about to launch its 'petro' cryptocurrency

Venezuelans line up to buy scarce food last month at a supermarket in Caracas

Venezuelans line up to buy scarce food last month at a supermarket in Caracas

While Venezuela is being pounded to death by runaway inflation, the Venezuelan Government and Maduro have chose to start selling its Petro cryptocurrency (PTR).

Pre-mining coins essentially means that once the ICO is finished, no new tokens can be created. 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. Every PTR coin is supposedly backed by a barrel of Venezuelan oil.

In December, Maduro announced the idea to create a cryptocurrency system, called Petro and backed by the country's oil reserves, which is expected to help the country to overcome the financial blockade.

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

Maduro's government calls the OAS a pawn of US policy and dismisses Almagro, a former Uruguayan foreign minister once friendly with Venezuela's socialists, as a turncoat working for Washington. The petro does not give investors any ownership stake in Venezuelan oil. The government has been in default on some of its debt since November.

Trump "campaigned promoting non-interference in other countries' domestic affairs", Maduro tweeted, tagging the US president's account.

The first operations will be carried out through a private sale, Maduro has said, without elaborating.

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It's unclear how much demand the petro will draw.

It's also unclear how investors will be able to sell the petro.

In August, the Trump administration hit the Maduro regime with financial sanctions that prevent any bondholders with business in the United States from buying new Venezuelan government bonds.

Rubio and Menendez wrote at the time: "It is imperative that the U.S. Treasury Department is equipped with tools and enforcement mechanisms to combat the use of cryptocurrency to evade U.S. sanctions in general, and in this case in particular".

The cryptocurrency has since dropped to $11,000, suggesting President Maduro may have missed the crypto boat.

Maduro, who is a president and a prime minister, however, was undaunted and in January said 800,000 Venezuelans had already been recruited to mine the cryptocurrency.

On a recent tour of Latin America, top USA diplomat Rex Tillerson floated the idea of slapping sanctions on Venezuela's oil exports, the source of 96 percent of the country's revenues.

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