The world’s first state-backed cryptocurrency, Venezuela’s Petro, is convertible into several global currencies, including the Russian Ruble. El Petro was launched by Venezuela’s Maduro government as a way to bypass U.S.-led sanctions. In an interview with local television, Maduro said individuals and enterprises will be able to buy Petro with several fiat currencies as well as with bitcoin, ethereum, and NEM.
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Axis of Fiats Excludes the U.S. Dollar
The President highlighted that Turkish liras, Chinese yuan, Russian rubles, and the Euro as the currencies of the future, allowing Petro purchases for 15 days from March 23rd with the four specified fiat currencies. China and Russia have long-lasting credentials in political repression and human rights violations, and Turkey’s Erdogan regime is becoming increasingly repressive. The Euro aside, the select laundry list of currencies Maduro selected as currencies of the future is an interesting one, to say the least.
It is also possibly a line-up of fiat currencies that perfectly illustrate the need for, and liberating spirit behind, the creation of cryptocurrencies.
President Maduro revealed that in the course of the currency’s pre-sale, more than 200,000 orders had been placed from about 133 countries, amounting to roughly $5.25 billion USD. Maduro also pointed out that even American businesses had shown an interest in purchasing the state-backed cryptocurrency.
On March 19th, U.S. President Donald Trump issued an executive order forbidding American citizens and enterprises from buying the Venezuelan oil-backed cryptocurrency, doubling down on American sanctions against the South American nation.
Maduro stated that companies exporting goods out of Venezuela can accept Petro. PDVSA, Venezuela’s state-owned oil and natural gas company are permitted to receive Petro for exports:
“PDVSA and those enterprises that trade for foreign currency are authorized from now on to receive ‘el petro’ for their export deliveries.”
After the “successful” launch of the country’s cryptocurrency, Maduro plans to launch another token, “petro oro”, to be backed by the country’s precious metals reserves.
Putin Connections? Officials Deny Allegations
Recent reporting by Time Magazine suggests that the Petro is a covert joint venture between the Putin and Maduro governments to bypass crippling U.S. sanctions. According to the investigation, circumstantial evidence indicates Russia’s links to the Petro launch. Russian authorities have denied any association with the state-backed cryptocurrency.
As reported on Russian news agency Tass, Artyom Kozhin, the Foreign Ministry’s Deputy Director of the Information and Press Department, said that the allegations from Time’s investigation of Russian involvement in the launch of the Petro are a “blatant lie”:
“We homed in on a fake news story published by Time magazine and others that are popping up nowadays like mushrooms after a spring rain, claiming that they had a front-page exclusive on the alleged Russian origin of the Venezuelan cryptocurrency – the Petro.”
Venezuela recently lopped three zeros off the national currency, the Bolivar, in a bid to stabilize the economy. The new banknotes are set for a June 4th release. Venezuela has been suffering from hyperinflation due to U.S. sanctions and poor economic policies adopted by the government and its disastrous predecessor Chavez regime.
Is Petro the result of a covert partnership between Russia and Venezuela to sidestep U.S. sanctions? Let us know your thoughts in the comments section below.
Images via Pixabay, Kremlin