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Official advisors to Caracas recommend that the Petro—a new oil-backed cryptocurrency set up by the Venezuelan government to circumvent U.S. sanctions—be sold at a discount of up to 60 percent, according to a new report by Bitcoin.com
By mid-February, 38.4 million Petros could go on sale, raising $2.3 billion for the cash-starved government, VIBE, a new governmental advisory group, said. This is a large departure from the regime’s previous plan to have each coin backed by a single barrel of oil from the Orinoco belt in northern Venezuela. With a planned release of 100 million units, the Petro would have earned Caracas roughly $6 billion – if current oil prices stick.
“VIBE recommended Venezuela sell 38.4 million petros with a face value of around $2.3 billion in private placements starting on Feb. 15 at a discount of up to 60 percent,” an official document read by Reuters said. “Another 44 million petros with a face value of $2.7 billion should be offered to the public a month later.”
VIBE also had some suggestions for the use of Petros in the government’s official business:
“The [remaining petros] should be shared between the government and VIBE. The government [should] accept tax payments in petros, and state oil company PDVSA [should] incorporate cryptocurrencies in its dealings with foreign companies.”
As of last week, Venezuela was getting ready to pre-mine its cryptocurrency for an official release in just over a month from now. The country’s National Assembly had other ideas and declared the Petro illegal, though this has not stopped President Nicolas Maduro from pressing forward with his plan.
The Petro will not be privately minable in its early stages. Instead, the government will fully control its origination and distribution, according to Carlos Vargas, the Venezuelan Superintendent of Cryptocurrencies and Related Activities.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…