As has already been made known, the Venezuelan government has created its own cryptocurrency called Petro which has caused an interesting debate about the example of being the first official cryptocurrency case of a State and its implications.
The registration in the official web portal is an essential requirement to have access to the cryptocurrency, and this registration is for a limited time, in fact the deadline expires on January 21. According to unofficial information, more than 860,000 people had been registered. The country is looking for more citizens to register in the portal launched by the Superintendence of Cryptocurrencies and Related Activities.
One aspect to take in mind with this cryptocurrency, is that only registered citizens can buy the new cryptocurrency. In fact, this is established in the respective Creation Decree: “registration is an essential requirement for citizens to have access to Petro”.
The citizens of Venezuela who register to extract Petro will also obtain the privilege of buying other digital assets recognized by the government.
What will be the price of the Petro?
The government plans to guarantee each Petro with one barrel of oil. Maduro said that “each Petro will be equal in value to the Venezuelan oil barrel”. For now, the government has credited 5.3 billion barrels of crude oil to the country’s digital asset.
The Petro is clearly a way to circumvent US sanctions upon the Venezuelan regime. On January 6, 2017, Maduro announced the release of 100 million units of Petro in the coming days. The average price per barrel of oil is $ 59.07, since each unit is backed by one barrel of oil, the emission of 100 million Petros will equal $ 5.9 billion.
According to the Organization of Petroleum Exporting Countries (OPEC), the South American nation has the largest oil reserves in the world. In addition, oil is the main export product of Venezuela, pocketing 95 percent of export earnings.
However, the global context in which the creation of this cryptocurrency is framed is highly risky. In early December 2017, Venezuelan President Nicolás Maduro announced the plan to launch cryptocurrencies backed by oil, gas, gold and diamond reserves. The measure was taken to overcome the financial blockade suffered by the country by the United States.
The implications of the blockade imposed by the US Department of the Treasury have a potential impact on any natural or legal person who trades with the “Petro”, however not yet have a precise position on the matter by the North American entity. In any case it is advisable to be very cautious and consider that negotiating with the new cryptocurrency could be a complication of connotations that are difficult to overcome.
Cryptocurrencies are intended to be decentralized by nature, and their main function is to provide transparency during transactions, which determine the value of the cryptocurrency. Venezuela will be one of the few nations that will actually implement legalized cryptocurrencies regulated by the state, with which decentralization by definition would disappear in this cryptocurrency.