Venezuela to Sell Its Oil-Backed Cryptocurrency at a Discount

Cryptocurrency Venezuela

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Sead Fadilpašić

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Sead Fadilpašić

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Sead specializes in writing factual and informative articles to help the public navigate the ever-changing world of crypto. He has extensive experience in the blockchain industry, where he has served...

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June 25, 2023

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A newly-formed advisory group to the Venezuelan government, VIBE, have recommended that 38.4 million of the country’s newly formed oil-backed cryptocurrency, the petro, be sold at private placements at a discount of up to 60%. This is according to a document reviewed by Reuters.

In December 2017, Venezuela announced the creation of an oil-backed national cryptocurrency, the petro, intended to supplement the bolivar fuerte as a means of securing international financing. Venezuelan president Nicolas Maduro said the petro would help Venezuela “advance in issues of monetary sovereignty, to make financial transactions and overcome the financial blockade.”

A month after the proposed private placements, starting on February 15th, 44 million petros should be offered to the public. The document was quoted by Reuters also saying that the remainder of the petros be shared between the government and VIBE. In addition, “the document suggested the government accept tax payments in petros, and that state oil company PDVSA incorporate cryptocurrencies in its dealings with foreign companies.”

Still, according to the news outlet, several high-ranking government advisers have discussed the proposal, although it was “not immediately clear if the proposal would be accepted”.

On January 5th, Maduro assigned 5 billion barrels of crude oil to back the new currency, ordering the issue of 100 million petros.

The opposition, however, says it is illegal to use the country’s natural reserves to issue debt. The Venezuelan parliament has declared the oil-backed cryptocurrency in violation of the country’s Constitution. According to deputy Williams Davila, the government only wants “to evade financial sanctions, openly violating the Constitution, and legitimizing illicit transactions.”

Maduro was quoted on his annual message on Monday, saying: “The center of financial policy will be the consolidation of the petro. This cryptocurrency is the future of humanity. Venezuela has entered the future.”