We first reported on el Petro in December 2017 and a lot has changed since the original announcement. Some things have not changed – Venezuela is still in the storm of hyperinflation and Maduro is still President.
el Petro is the national cryptocurrency backed with gold, diamonds, oil and, apparently, iron has been added to the mix, that was designed for the specific purpose of circumventing the Federal Reserve Note, U.S. dollar and this goal has now been accomplished. What impact this will have on the hyperinflation that is raging in Venezuela is yet to be seen. If this cryptocurrency pulls Venezuela from the depths of this nightmare President Maduro will be heralded as a national hero. If it fails, which is looking less likely all the time, the country will lose most of it’s mineral wealth and China or Russia or both will divide the spoils.
This is the first national cryptocurrency to come to market, but no one really seems to care. There is almost no reporting on this situation anywhere in the world. One would think there would be plenty of news coming out the East but, once again, almost nothing. Wonder why? Is this situation destine to fail or is Venezuela being set up?
Our friend and colleague, Jeff J Brown, China Rising, sent us an article discussing the actual launch of el Petro on October 29.
The sale of Petros began on Monday for those who wish to acquire them. Companies and individuals can buy Petros either using currencies such as euros, dollars, yuan, rubles, and rupees; or employing cryptocurrencies such as bitcoin or litecoin. These purchases can be made through the National Treasury of Crytoassets’ web page or exchange houses.
As reported by the National Superintendence of Cryptoassets and Related Activities (Sunacrip), this Venezuelan cryptocurrency can be used as a means of payment for financial transactions of any magnitude.
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From Nov. 5 on, the launching of the Petro will experience a second milestone as the state-issued cryptocurrency could be purchased in sovereign bolivars. This entails a further development of an independent, transparent and open digital economy available for the direct participation of citizens.
“The State of Venezuela will promote and encourage the use of the Petro, to make it a fundamental investment option, savings mechanism and means of exchange with State services, industry, commerce, trading, common people and the whole world”, The Treasury of Cryptoassets stated. Source
This latest move is another step towards Eastern economies, like Russia and China, and away from Western economies, like the U.S.. The U.S. has already stated there will be no trade with the U.S. using el Petro. How can a nation pull itself out of a bad economic situation if a nation is not allowed to conduct business in the currency of their choosing?
We reported in August one of the bigger moves made by Venezuela to sure-up use of el Petro
Venezuelan President Nicolas Maduro had previously announced plans to create four economic zones using the Petro. He has also stated his country’s intent to use the Petro to complete property sales, as well as the procurement in public works.
Russian and Venezuelan officials are also discussing bilateral cooperation related to railroad projects in the South American country, agricultural matters health and the military.
The Venezuelan Foreign Ministry also reported that the agenda includes talks about the strategic alliance between Russian energy firm Rosneft and Venezuela’s Petroleos de Venezuela S.A., or PDVSA, and the possibility of building mining industry equipment.
Attending the meeting is Oleg Ryazancev, Russia’s Deputy Industry, and Trade Minister. He was quoted as saying that his country considers Venezuela as being a strategic partner and such bilateral meetings between the two nations “certify the success of our cooperation.” Source
This is an interesting turn of events. We’ll see how it plays out over the next few months. It appears most of the heavy lifting to launch this new currency is now complete and it’s time to see if it will work or not. Will any one accept it, other than Russia? Will Russia begin pushing el Petro into other nations either through the EAEU alliance or one of the other economic alliances (BRICS, SCO, BRI) they are connected? With Russia and China both discussing the development of a cryptocurrency it will be interesting to see the impact this situation has on the development of other national cryptocurrencies.
