Venezuela currently has two cryptocurrencies. First, they introduced Petro, and now they have announced Petro Gold. While Petro was an oil-backed cryptocurrency, Petro Gold is going to be backed up by precious metals.
Petro has announced back in December 2017 and released a few days back. Just following which Petro Gold made the news. Here is what Venezuelan president, Nicolas Maduro had to say on the matter, “Next week I‘m going to launch the petro gold, backed by gold, which is even more powerful, that will strengthen the petro.”
Now the question arises - what is the motive behind the big push on digital currency? Well, as Maduro puts it, Venezuela is currently in a war against hyperinflation and a collapsing socialist economy. He also addresses the “economic war” that has been waged against them by the U.S. government. With the inception of these two digital currencies, Maduro hopes to overcome this problem.
As per the president, Petro and Petro Gold will help to break the financial blockage and help the nation gain regarding international financing, both in economics as well as social development. He further stated that the currency would be fully regulated under the superintendence of Cryptocurrencies and Related Activities.
However, not all people are not on the same foot as their president.
The opposing leaders have addressed Petro as an illegal debt issue. Investors have shown concern regarding Venezuela’s transparency and solvency. The country’s congress has stated that the digital currency is straight out illegal and goes against the country’s Constitution. Jorge Millan, one of the legislators who was involved in the discussion about Petro had the opinion, “This is not a cryptocurrency, this is a forward sale of Venezuelan oil.” On top of this U.S. has asserted that this cryptocurrency will violate the section between them and Venezuela and thus create legal risks for U.S. investors.
But amazingly, despite all the turmoil, Petro itself had raised over $735 million in just a few hours from when it was open for sale. Furthermore, there is also positive responses from investors in Brazil, Denmark, Honduras, Poland, Norway, and the Middle East. Granted it was just a mere number of days since Petro was launched and only time can tell where things go.