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What is Venezuela's new petro cryptocurrency?
[Al Jazeera] Venezuela has officially launched the pre-sale its new digital currency called the petro. "Petro is born, and we are going to have a total success for the welfare of Venezuela," President Nicolas Maduro said on Tuesday. The launch of the so-called cryptocurrency comes as Venezuela faces deepening economic and political crises. According to the government, the petro is backed by oil, gas, gold and diamonds, and is meant to help overcome US and EU sanctions. Here is what we know about the new currency. What is the petro? The idea for the petro came from Hugo Chavez, who had foreseen a "strong currency backed by raw materials", according to the government's white paper on the petro. Announced in December 2017, the petro is intended to supplement Venezuela's bolivar fuerte (VEF) currency and help overcome US sanctions. Petros will be "pre-mined", meaning the government would produce and control it. Venezuela has allocated five billion barrels of oil to back its new digital currency, which will be tied to the cost of a barrel of Venezuelan oil. Where can you buy it? Initially, the petro will be sold in hard currency and other cryptocurrencies, not in the local bolivar currency. "The presale and initial offer will be made in hard currencies and in cryptocurrencies," Carlos Vargas, the government cryptocurrency superintendent, told state television ... and if you can't believe state television who can you believe? in late January. "It is not going to be done in bolivars at this stage," he added. "Our responsibility is to put [the petro] in the best hands and then a secondary market will appear." Vargas also said that after the initial sale, the petro could be sold in exchange for the bolivar. How much does it cost? Each petro will be backed by a barrel of oil and will be sold at the same price, according to the government. Prior to the launch, government advisers recommended that 38.4 percent of the petros should be sold in a pre-sale private auction at a discount of 60 percent. Posted by: Fred 2018-02-21 |
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