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Venezuela is getting ready to pre-mine its cryptocurrency for an official release six weeks from now, just one day after the country’s National Assembly declared the Petro illegal.
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.
“In a period of a month and a half, the sale of the petro cryptocurrency will take place” and interested parties will form their digital wallets, the superintendent said. “We will have a cryptocurrency whose verification and use in all exchange houses…will be supported under a widely known platform, which will allow the petro to be marketed anywhere in the world without major restrictions.”
President Nicolas Maduro has led a drive to recruit crypto-miners since the December announcement of the release of the Petro. The effort concluded with the establishment of a registry, which will remain open for sign-ups until January 20th. Mining is not illegal in Venezuela, and the name of the people on the list is open to the public.
Last week, Maduro said that he ordered the first 100 million units of its new oil-backed Petro—Venezuela’s cryptocurrency creation. Each Petro unit will be backed by one barrel of oil, and the 100 million units, at current value of $59.07 per barrel, should be worth almost US$6 billion.
While this sounds good on paper, the move is largely seen as a fanciful idea by analysts, and opposition politicians have said of the project that it is doomed to fail, according to Reuters. A lack of rule of law and falling production are unlikely to make the cryptocoin attractive enough for international investors, not to mention the escalating U.S. sanctions designed to constrict capital flows to Caracas. Citgo, Venezuela’s state-owned U.S. subsidiary, cannot currently repatriate its earnings to PDVSA due to the measures.
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…