• Monty Alexander

Venezuelan oil cryptocurrency launched

With Venezuela's increasing inflation and devaluation, the Venezuelan government has created an oil cryptocurrency (a form of digital currency, like Bitcoin) to try and improve the economy, according to the BBC.

This cryptocurrency will be called the "Petro." It is claimed to be the world's first sovereign cryptocurrency by Venezuela. Venezuela does not have the ability to pay beck their foreign debt, which is $150 billion, so they have created this cryptocurrency with the hopes that it will help with economic problems along with the country's debt issues.

The U.S. Treasury Department said that this cryptocurrency system could violate sanctions placed on the country last year. The Venezuelan government says that they hope to find a way around U.S. sanctions with this cryptocurrency.

The Venezuelan president, Nicolas Maduro, said that every cryptocurrency token will be backed by a barrel of crude oil. A total of 100 million Petros will be sold at the price of $60, based off of the price of Venezuela's crude oil during mid January. There was no information on exchanges with the cryptocurrency.

The power that the Venezuelan government has over this cryptocurrency could be dangerous for the people who purchase the Petros. It could be manipulated very easily by the Venezuelan government.

The official website had published a guide on how to set up an account and wallet for the cryptocurrency but did not have a link to do so on Tuesday, Feb. 20, 2018.

In March 2018, Venezuela will have the initial coin offering, which will offer 82.4 million petros at a discount to the public.