Venezuelan President Announces Official Launch of Oil-Backed Cryptocurrency “Petro”

This week, Venezuelan president Nicolas Maduro gave a televised speech to announce the official launch of the “Petro,” which is the first government issued cryptocurrency in the world.

Maduro said that the official public sale will start on November 5th, but that six major exchanges would be listing the Petro this week. However, the Petro is still not listed on CoinMarketCap, CryptoCompare, or any other major exchange.

Maduro also revealed the official website for the Petro has already been launched, as well as mobile wallets for the cryptocurrency, which are already available at Google Play.

Questions About the Petro

The government of Venezuela insists that the Petro will be backed by oil, which if true, could prevent the government from excessively printing money and devaluing the currency, a policy which has caused the current economic crisis in the country.

Petro’s recently released whitepaper specifies that the currency is backed by a portfolio of Oil, Gold and Diamonds. Although, it is important to note that the public has lost significant trust in the Venezuelan government and its central bank as a result of the hyperinflation crisis, and the sloppy roll-out of the Petro.

Initially, Madura promised that the Petro would be ready for full use by August, which included point of sale payments in grocery stores and other local merchants. Now, it seems that the Petro is far from ready for mainstream use in Venezuela.

Madura says that all oil purchases in and out of the country will be paid in Petro, which could be where the most popular use case for this blockchain. Venezuela is one of the world’s top exporters of oil, so if they were able to require foreign buyers to trade with them in Petro, it could turn this crypto into a valuable asset.

However, the Petro is not expected to be welcomed by most Venezuelans, who are already becoming more comfortable with using decentralized alternatives, such as bitcoin, monero, bitcoin cash and dash. Last month, Business Insider reported that dash is especially popular for point of sale transactions in the country.

Dash Core's CEO, Ryan Taylor, told Cointelegraph that areas dealing with economic turmoil can gain the most benefit from crypto. Taylor said:

We’ve found that regions of high inflation rates and industries in which cash handling or credit card chargeback rates are high have been most excited to adopt the technology. For us, we focus on those segments in which cryptocurrency can offer the most benefit, and that’s one of the reasons growth in acceptance is so high.

Ironically enough, Ethereum developer Joey Zhou pointed out that this week that the whitepaper for the Petro seems in fact to be a “blatant Dash clone.”