Venezuela’s oil-backed cryptocurrency, the petro, is a step closer to reality following the release of the official whitepaper. The eagerly anticipated document outlines the token model and crowdsale mechanism that will be used to launch the Ethereum-based project in February. Having been officially signed off by president Nicolás Maduro, the whitepaper is finally available for scrutiny and it doesn’t disappoint.
A pre-sale of Venezuela's new "petro" cryptocurrency will begin on Feb. 20, President Nicolas Maduro said on Tuesday, a move that the government hopes will help pull the country out of a dire economic crisis.
With the price of one PTR provisionally fixed at $60, to correspond with a barrel of oil, Venezuela’s tokens are more expensive than even the $50 Bitconnect X is seeking in its current ICO. In fairness to the South American nation, its cryptocurrency is not a Ponzi scheme. Its creators promise:
Petro will give investors the opportunity to enter the crypto asset market with an instrument of intrinsic value that is safer, more stable and susceptible to a fundamental analysis because it is linked to a widely known industry, and therefore, suitable to be used in large transactions and even as a store of value.
Critics have slammed the initiative as not only illegal but nothing more than a debt issuance by the government amid quadruple-digit inflation and major shortages.
Maduro has previously said Venezuela will issue 100 million tokens, each valued at — and backed by — the equivalent of one barrel of Venezuelan crude.
That would put the value of the entire petro issuance at just over $6 billion.
"All the cryptocurrencies of the world have been revalued after Venezuela's announcements about the creation of the petro," said Maduro in a speech broadcast on state television.
Venezuela is seeking to raise hard currency amid a crippling crisis.
The potential impact of the Petro tokens has been a hot subject of debate. The U.S. Treasury Department previously issued several warnings directed toward Venezuela’s proposed token issuance, saying that an ICO of this sort would be an infringement of the sanctions the U.S. had imposed against Maduro’s socialist government.
Some skeptics have also questioned the legality of the ICO, arguing that using oil reserves to issue debt (essentially what Venezuela is doing) could be considered illegal, especially as this is tantamount to an advance payment for the nation’s oil. It is interesting to note that Venezuela currently has the largest oil reserves in the world.