Petro's presale goes live

The Venezuelan government has officially launched a pre-sale of “Petro”, the nation’s controversial commodities-backed cryptocurrency. It follows an announcement by Venezuelan President Nicolas Maduro of intentions to launch his country’s new oil-backed cryptocurrency this month.

”I am announcing that on February 20 of this year, Venezuela begins the presale of the cryptocurrency, the Petro”,

remarked Maduro.

The Petro pre-sale and Initial Offering

According to the government-issued whitepaper, the pre-sale will utilise ERC20 tokens, created and sold on the Ethereum platform, and act as the precursor to the larger ICO (Initial Coin Offering). 82.4 million tokens will be available initially at a presale price of $60 which the government hopes will raise up to $5bn, according to Latin American news source Telesur. President Maduro has suggested that ultimately, 100 million Petros will be issued, with a total value over $6 billion.

Petro: Desperation breeds Innovation

Late last year, Maduro announced his country would launch a cryptocurrency backed by the world’s largest oil reserves, in addition to Venezuelan gold, gas and diamond deposits, in a move to counter U.S. sanctions aiming to choke out his country’s access to dollars. This was amid the Venezuelan economic crisis and a sharp drop in the value of the bolivar, in an extraordinary attempt to raise funds for the cash-strapped nation.

Maduro has asserted that the Petro is already having a “major impact”, adding that “this is the future… let’s have faith in what we create, in the intellectual and technological force that our country has”.

In a recent interview, Carlos Rivas, a Venezuelan expert in big data and digital trends, remarked that the oil-backed cryptocurrency should substantially boost revenues for the cash-strapped Venezuela.

“The markets are eager for assets and the projected returns on cryptocurrencies far surpass those on standard currencies,”

he said.

Criticisms: A worthless cryptocurrency to skirt sanctions?

However, as the Petro was being floated by Venezuela, it is likely to encounter politically-motivated backlash from other nations, in the form of “a global campaign to discredit the Petro” and undermine confidence in the digital currency. The U.S. had already begun discrediting the currency, with Senators Marco Rubio and Robert Menendez denouncing the Petro in an open letter addressed to U.S. Treasury Secretary Steven Mnuchin.

Even in its home nation, the Petro’s legality has been questioned by the opposition-run congress, arguing that the issuance “would effectively be borrowing against the country’s oil reserves”, which violates laws that require congressional approval for government borrowings.

Nonetheless, the head of Petro’s launch and Venezuelan cryptocurrency regulator Carlos Vargas has suggested there has been significant interest from Qatar, Turkey, Europe and even U.S. investors. Petro’s presale will undoubtedly attract attention from global investors and government authorities as it goes live today.

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Media and Resources

Petro Whitepaper

Coindesk: Venezuela’s ‘Petro’ Token Launches in Pre-Sale

CNBC: Venezuela about to pre-sell ‘petro’ cryptocurrency, and other countries could follow

Bitcoinist: Venezuela’s National Currency Expected to Go Global

Fx Street: Venezuela’s “Petro” pre-sale goes live on Tuesday

Reuters: Venezuela to launch oil-backed cryptocurrency

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