Venezuela is launching yet another cryptocurrency to save the economy

The petro gold will be the state’s second official digital-token launch in the space of a week.
February 22, 2018, 9:45am

Nicolas Maduro is so convinced that cryptocurrencies are going to save the failing Venezuelan economy that he’s launching the state’s second official digital token in the space of a week.

On Wednesday he announced Venezuela will launch the “petro gold” next week, following Tuesday’s launch of a pre-sale of the petro, a digital currency backed by the country’s oil reserves, Maduro hopes it can raise as a much as $6 billion, and he said the pre-sale had raised $735 million in one day, but he gave no details about who had invested.

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Previously, the official running the project said there had been interest from investors in the Middle East, Turkey, Europe and even the U.S. — despite the Treasury warning that buying Venezuela’s cryptocurrencies could violate sanctions and lead to legal problems.

With its currency devalued, inflation on track to hit 13,000 percent by the end of 2018, and citizens experiencing food and medicine shortages, Maduro is hoping the sale will give the country’s economy a much-needed boost.

On Wednesday Maduro was back on TV announcing the launch of a second digital coin.

“Next week I‘m going to launch the petro gold, backed by gold, which is even more powerful, that will strengthen the petro,” Maduro said in a televised speech Wednesday.

The Venezuelan leader gave no more details about the coin, but he has previously claimed that cryptocurrencies will help the country skirt harsh European and U.S. sanctions.

It is unclear if the gold Maduro was referring to was sitting in the central bank or still in the ground.

Speaking about the launch of the petro, Maduro said: “Today, a cryptocurrency is being born that can take on Superman,” referring to the authorities in Washington.

During his TV address, Maduro was flanked by the type of computers used to mine cryptocurrencies like bitcoin and litecoin. However because all 100 million petro tokens are pre-mined, no such mining rigs will be required.

Opposition lawmakers in Venezuela claim the petro is illegal as it is effectively borrowing against the country's oil reserves, while most experts believe there won’t be sufficient support to sustain the new digital coin.

The government says it wants the petro to be used as an alternative to the hugely devalued bolivar when paying taxes, contributions and public services.

Cover image: Venezuelan President Nicolas Maduro