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Venezuela’s cryptocurrency, El Petro (PTR), has allegedly raised $735 million on the first day of the pre-sale February 20, reports Reuters, quoting claims of the country’s president Nicolas Maduro. They, however, could not be independently verified.
“Today, a cryptocurrency is being born that can take on Superman,” said Maduro, using the comic character to refer to the United States, as he was flanked by mining rigs in a state television address.
Maduro did not provide details about the initial investors, but the official site of the cryptocurrency went live and published information about the coin, a white paper and a guide on how to set up an e-wallet, as well as information available only in Spanish.
The website states that the Petro is backed by Venezuela’s crude oil reserves (the country has the largest proven crude oil reserves in the world) – each token will be valued at and backed by a barrel of Venezuelan crude oil.
“Within the framework of policies to strengthen monetary sovereignty and promote welfare by bringing power closer to its citizens, the government of the Bolivarian Republic of Venezuela has decided to embark on an ambitious project for the future, with the vision of turning the country into a blockchain-based solutions development hub for emerging economies,” the site noted.
The Petro will be an instrument for the creation of a “freer, more balanced and fairer international financial system,” the site also said. In reality, the government is trying to circumvent the international sanctions and obtain hard currency.
There, however, is no information about the sum already raised or the price of the coin. According to Reuters, financial advisers have recommended that 38.4% of the petros should be sold in a private auction at a discount of 60%.
The Petro goes live for public trading next month, but financial analysts and blockchain experts remain skeptical that the coin will attract significant investment. Many warn that the Petro might quickly become a “shitcoin”.
Last week the Venezuelan Cryptocurrency Superintendent Carlos Vargas said they were hoping to attract investors from Qatar, Turkey, the Middle East, Europe and the USA. The U.S. Treasury Department, however, has warned the Petro may violate sanctions levied last year. They block U.S. banks and investors from acquiring newly issued Venezuelan debt, effectively preventing the nation from borrowing abroad to bring in new hard currency or refinance existing debt.
Maduro had previously said that 100 million petro tokens worth some $6 billion will be issued. The tokens will be used as payments for some goods and services on the domestic markets, but the government will promote its acceptance throughout the world.
Meanwhile, international media report on the plight of the Venezuelan people who are struggling with hyperinflation and shortage of food, medicines and pretty much everything else, of babies dying of malnutrition and lack of medicines. The government, however, is stubbornly refusing international aid in food and medical supplies.