Venezuela Launched A Cryptocurrency

Now the real challenge for the financially-struggling country begins - finding more investors willing to put their money in a country plagued by economic and political issues.

- Swiss financial watchdog FINMA said on February 21 that it is investigating several Swiss banks over whether they followed anti-money laundering rules amid a widening $1 billion graft probe involving Venezuela's state oil company. But for now, proponents of this digital token called Petro, are basking and touting it as a success. The US imposed against the country by economic sanctions for the persecution of opposition representatives.

Maduro didn't seem to hide from that belief either.

"The Petro will most likely suffer all of the same ills as Venezuelan debt", said David Smilde, a sociology professor at Tulane University, an expert on Venezuela's economic conditions.

"Today, a cryptocurrency is being born that can take on Superman", he claimed at the launch.

Caracas said that each unit of the petro is pegged to the price of one barrel of Venezuelan oil.

In a recent tweet, Venezuelan oil minister P.P. Petróleo revealed that Maduro has ordered the country's state energy company, PDVSA, to close a few deals using the coin.

Venezuela is introducing a new cryptocurrency as the economy struggles to cope with USA sanctions and hyperinflation.

"Every single Petro will be backed by a barrel of oil".

In a letter to the treasury secretary, Florida Senator Marco Rubio and New Jersey Senator Robert Menendez wrote: "We have serious doubts about whether Venezuela has the capacity to launch a cryptocurrency..."

One interesting detail that was revealed is Russia's involvement.

The blockchain technology experts have warned that Petro is unlikely to attract significant investment.

Despite being previously disclosed in a whitepaper provided by the government, the petro will not be a token on the Ethereum network. The white paper doesn't do a great job of defining the difference between pre-sale and actual tokens, but says 82,400,000 will be sold. The cost of all 100 million tokens would be slightly over 6 billion Dollars, according to data provided by Nicolas Maduro in recent months, although no new price information was provided.

The 17.6 percent of tokens not market for public sale "will be retained by the Venezuelan Superintendency of Currency and Related Activities (SUPCACVEN)".

The government was expecting to draw investment from investors in Turkey, Qatar, the U.S. and Europe, according to the Venezuelan Cryptocurrency Superintendent Carlos Vargas.

It's the claim that USA investors are among the Petro buyers that is raising eyebrows.

The beleaguered South American country outlined its plans on a new website built for petro.

Even the U.S. Treasury Department has warned Venezuela that if the situation demands it may violate the sanctions levied a year ago.