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Venezuela's national cryptocurrency is officially up for sale

22 February 2018

Venezuela is mired in a deep economic crisis triggered in large part by a fall in crude oil prices and a drop in oil production, which accounts for about 96% of the country's exports.

As CoinDesk reported previously, the Venezuelan government claims that the petro token will be backed by a single barrel of oil and tied to the market price from the previous day. "We won't help out a dictatorship that only cares about maintaining power on the backs of the Venezuelan people and their suffering", the party said in a statement.

"Today, a cryptocurrency is being born that can take on Superman", Maduro was quoted as saying by Reuters, referring to the way of the comic book character.

Venezuelan President Nicolás Maduro said that the petro aims to infuse his cash-strapped economy with around $6 billion in sales from the initial cryptocurrency offering. The U.S. Treasury Department warned in January that investors who buy the cryptocurrency "may be exposed to U.S. sanctions risk".

Maduro announced in early December that Venezuela - which is under sanctions from the United States, as well as the European Union - was creating the digital currency. They will create 100 million virtual currencies without extra emissions.

Venezuela's opposition won control of the National Assembly in a 2015 landslide vote that was their biggest electoral victory in almost two decades of socialist government. "The government has no plans of undertaking structural reform".

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Bobby Ong, the co-founder of CoinGecko, a cryptocurrency ranking website, said the sale of the petro fits into a growing trend of asset-backed cryptocurrencies as investors look for digital coins backed by real-world assets.

The cryptocurrency will attract investments from Turkey, Qatar, the US, Europe, the country's crypto-currency regulator, Carlos Vargas, the government's cryptocurrency superintendent, told reporters.

Prior to the launch, government advisers recommended that 38.4 percent of the petros should be sold in a pre-sale private auction at a discount of 60 percent.

Venezuelan President, Nicolas Maduro has invited U.S. President Donald Trump to launch dialogue between Caracas and Washington, setting the date and time for a meeting.

The sanctions - levied past year by Washington - block USA banks and investors from acquiring newly issued Venezuelan debt, effectively preventing the country from borrowing overseas to bring in new hard currency or refinance existing debt. One document highlights the use of Ethereum network while another document which is now being referred to as the buyer's guide shows the use of NEM blockchain system.

Venezuela's national cryptocurrency is officially up for sale