Venezuela is getting ready to launch within days its own cryptocurrency--El Petro--which will be backed by more than 5.3 billion barrels of oil and support $267 billion worth of financial instruments, Venezuela’s Communications Minister Jorge Rodríguez said on Thursday.
Earlier this month, Venezuela’s President Nicolas Maduro shocked both analysts who follow the country’s flirting with default and the cryptocurrency community by announcing that Venezuela wanted to launch the petro cryptocurrency, backed by oil, diamonds and gold reserves, to help the country to “advance in issues of monetary sovereignty, to make financial transactions and overcome the financial blockade.”
Earlier this week, Maduro said that the 5 billion barrels of oil reserves at the Ayacucho block 1 in Venezuela’s Orinoco Belt will back the cryptocurrency, according to a press release posted on the website of state oil firm PDVSA.
According to Communications Minister Rodríguez, the petro cryptocurrency will comply with all mechanism of the other cryptocurrencies, but the difference will be that Venezuela’s digital currency will be backed by hard assets, namely oil wealth.
Venezuela’s claim that the petro will be backed by assets worth $267 billion compares to the current market capitalization of the most popular cryptocurrency, Bitcoin, which stood at $241 billion early on Friday. Related: What Drove WTI Above $60?
Venezuela’s oil-backed cryptocurrency is not the only one in the works.
Earlier in December, a team of banking and technology managers and former U.S. regulatory commissioners said that they would launch the world’s first regulatory compliant cryptocurrency backed by a physical asset—OilCoin, which will be based on oil reserves. OilCoin’s public token sale, also known as the initial coin offering (ICO), is expected to begin in January 2018. The aim of the OilCoin is to tokenize barrels of oil, where each token will represent the value of one barrel, and provide users with a meaningful safe haven from cryptocurrency volatility, the team launching the digital currency said.
By Tsvetana Paraskova for Oilprice.com
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