Venezuela’s Petro Cryptocurrency Gains Acceptance
José Vielma Mora, Venezuela’s Minister for Foreign Trade and Foreign Investment, met with foreign investors this week to discuss trade involving the Petro, Venezuela’s proposed oil-backed cryptocurrency. According to Mr. Mora, a number of countries have agreed to accept the Petro in exchange for goods such as basic food items and medicine. Notably, a group of businessmen from Brazil have decided support the Venezuelan Petro while investing $300 million into the Venezuelan economy. Norway, Poland, Denmark, Honduras, and Vietnam have also indicated that they’re willing to accept the Petro as payment for various goods, estimated to be worth $435 million.
Meanwhile, a Canadian trade chamber has expressed its interest to invest in Venezuela’s “pharmaceutics for humans and animals”. Per Mr. Mora, the government of Venezuela had been working on attracting more foreign investors. The country had also been trying to get its private sector involved in different business projects with foreign entities, according to the Minister. These new developments seem to be a positive sign, especially if you consider that inflation in the South American nation has increased by over 4,000% in just the past year.
Digital Currency Could Provide Hope
Due in part to rampant corruption and a US-led financial blockade, cash within the country’s borders is now in very short supply. As a result, it is becoming extremely difficult to carry out even the simplest day-to-day transactions. So now the country’s leaders and many of its frustrated citizens are hoping that the new oil-backed Petro (PTR) cryptocurrency will be able to provide some economic relief.
Presently, the price of one PTR is equal to $60. This is not a fixed rate because the value of one PTR is intended to correspond with the price of a barrel of oil. So, if oil prices go up, then so will the value of PTR, and vice versa. Since the Petro cryptocurrency will be backed by a valuable real-world commodity, the country thinks that it might have a fair chance in being considered a reliable medium of exchange by international traders. Based on the initial response of the countries just mentioned, it seems as if the Petro could potentially aid in Venezuela’s economic recovery.
Plenty Of Criticism
Despite recent news, the state-backed crypto, which has been proposed by Nicolás Maduro Moros, the Venezuelan President, has been called illegal by its critics. According to the country’s opposition party, it is unlawful to issue debt, which is what they consider Petro tokens to be, using the country’s oil reserves.
Nevertheless, President Maduro has stated that his country’s government will issue 100 million tokens, with each token backed by a barrel of oil. This roughly equates to $6 billion, the estimated value of all tokens combined. In response to this initiative, the United States has warned that it could violate sanctions imposed on the nation. Per the United States, “the petro digital currency would appear to be an extension of credit to the Venezuelan government”.
Regardless of what ultimately happens as far as the Petro is concerned, one thing is for certain. Millions of innocent Venezuelans have been suffering for quite some time now due to the incompetence of their government. Their suffering has been amplified because of merciless international sanctions. There has to a better solution for the citizens of a country that happens to have the world’s biggest oil reserves.