Venezuelan President Nicolas Maduro has urged 10 countries in the Bolivarian Alliance for the People of our America (ALBA) to support and work together for the creation of his proposed oil-backed cryptocurrency, Petro. Maduro has first announced his intention to create Petro in early December 2017, to shore up the country’s financials and evade the international sanction by US and EU. During a meeting with ALBA states on Jan 12, he said:
“I put it on the table, brother governments of the ALBA, the proposal of the cryptocurrency of the Petro, so that we can take it on as one of the projects of integration of the 21st century in a bold way, but also in the manner of a creator and a creative.”
On Jan 6th, he has ordered the issuance of first 100 million Petros, each backed by a barrel of oil. For this purpose, he has already kept aside 5 million barrel of Venezuelan oil. The cryptocurrency is set to launch within the 6 weeks time frame in form of an auction as it will not be pre-mined.
However, on Jan 9, the country’s parliament has declared the cryptocurrency as illegal and termed it as fraudulent currency. Parliament Deputy Williams Dávila said the creation of Petro only serves to “Evade financial sanctions, [and is] openly violating the Constitution, and legitimizing illicit transactions.”
Venezuela is facing a hyperinflationary situation and tough sanctions from US and EU and has seen a massive rise in the use of digital currency over fiat- Bolivar for daily use among its population.