Venezuela Preparing Its Own New Cryptocurrency Amid Controversy

Venezuela is getting ready to officially launch a pre-sale for a new cryptocurrency. This currency would be called Petro.

The pre-sale will begin on February 20. About 100 million coins or menes would be sold. Some investors around Europe and North America have expressed interest in supporting the currency, but no specific names have been given out.

The Petro currency is a commodity-backed investment. It will be tied to many commodities based out of Venezuela including oil, diamonds, gas and gold.

But even with this, there are worries about how the currency would develop. This comes amid many concerns surrounding the Venezuelan government and how the national economy is falling apart.

Attempt to Raise Funds

The main reason for the release of the Petro is for Venezuela to potentially raise added funds for many of its operations. These include funds for the managing its budget. The country’s budget has been heavily depleted in recent time.

There have been some concerns in Venezuela over sanctions against the country imposed by the United States and Europe. These include sanctions imposed in protest over some of the actions carried out by the government led by president Nicolas Maduro.

Create a Supported Economy

The new currency will also help with improving upon how well Venezuela can keep its economy moving. This comes as the country will raise its own financing for economic and governmental functions. The general effort will be to keep Venezuela independent and capable of managing its own individual economic functions without outside help in some way.

Concerns Surrounding the Currency

Although the efforts for producing the Petro are expected to make a large flourish in the Venezuelan economy, there are significant concerns abound surrounding the currency. To start, part of the national congress argues that the currency is actually illegal and that Maduro is stepping over his line of duty in producing the currency.

This is also believed to be a desperate move by the Maduro government to try and get the country’s economy from being worse than it already is. Many socialist actions imposed by Maduro have led Venezuela into extreme jeopardy. Hyperinflation has developed in the country as the economy continues to struggle. The bolivar, the official currency of Venezuela, is at risk of collapsing as a result of the ongoing issue.

Also, many are stating that the Petro is the complete antithesis of the Maduro government. While the current president has been extremely secretive in its actions, the Petro would be a fully transparent currency that focuses on trust among people completing transactions. This would be the opposite of what the current Venezuelan government is working with.

The last concern is that the oil reserves that will back a part of the currency include the Ayacucho 1 petroleum block located around the eastern part of the country near the Orinoco oil belt. The oil in that region has yet to be drilled for. Therefore, it is difficult to figure out if the region is actually viable for oil drilling purposes.