Published: Wed, February 21, 2018
Worldwide | By Gretchen Simon

Venezuela Rakes In $735 Million From El Petro Proceeds

Venezuela Rakes In $735 Million From El Petro Proceeds

Venezuela's currency is the world's first government cryptocurrency.

Venezuela raised $735 million in the first day of the pre-sale for its "petro" cryptocurrency, the country's president Nicolas Maduro said in his Twitter account. A member of the opposition-controlled Congress in Venezuela recently called the currency "illegal" and accused it of being fuel for corruption in the country.

"The Petro reinforces our independence and economic sovereignty and will allow us to fight the greed of foreign powers that try to suffocate Venezuelan families to seize our oil", he said. Venezuela will also accept national tax payments in PTR and appears willing to allow it to run alongside - or even supplant - its existing fiat currency, the bolivar.

However, the blockchain experts have warned that this move is most unlikely to attract any significant investment. Opposition leaders have said the sale constitutes an illegal debt issuance that circumvents Venezuela's majority-opposition legislature, and the US Treasury Department has warned it may violate sanctions levied a year ago. He added that many transactions in tourism, gasoline and oil can be carried out with Petro.

The US Treasury Department, for its part, has warned US citizens and companies that purchasing el petro would mean violating sanctions, with US Secretary of State Rex Tillerson saying that Washington was weighing sanctions on Venezuela's oil sector to increase pressure on the country's authorities and make them "return to a constitutional process".

Raising further doubts, Maduro has said that the undeveloped Orinoco oilfield will back the digital currency, creating no tangible barrels of oil that investors can cash in, said Jean Paul Leidenz, a senior economist at Caracas-based EcoAnalitica.

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The price of Petro to the cost of a barrel of Venezuelan oil, that is 60 dollars at the moment, but will be adjusted depending on fluctuations in the markets.

The government was expecting to draw investment from investors in Turkey, Qatar, the U.S. and Europe, according to the Venezuelan Cryptocurrency Superintendent Carlos Vargas.

Mr Maduro says his government is the victim of an "economic war" led by opposition politicians with the help of the government of US President Donald Trump.

Even the U.S. Treasury Department has warned Venezuela that if the situation demands it may violate the sanctions levied a year ago.

There, however, is no information about the sum already raised or the price of the coin.

Despite being previously disclosed in a whitepaper provided by the government, the petro will not be a token on the Ethereum network.

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