The Venezuelan government has published a decree outlining the operation of Venezuela’s national cryptocurrency, the Petro. It details the government’s plans for the new currency, including its issuance, mining, and trading. In addition, the Petro will be backed by 5 billion barrels of crude oil.
5 Billion Barrels of Oil and Mining Plan
Venezuela’s president Nicolás Maduro has assigned 5.3 billion barrels of crude oil worth $267 billion to back the nation’s cryptocurrency. He first announced the creation of the Petro in early December, as news.Bitcoin.com reported.
During a weekly national radio and TV broadcast, he showed a “document formalizing the provision of the certified Ayacucho oil field, No.1 in the Orinoco Petroleum Belt, for the support of El Petro cryptocurrency,” according to RT. Citing that “every single Petro will be backed by a barrel of oil,” Maduro confirmed:
Issuance and Trading Plans
The Maduro government has published a Gazette which outlines a decree consisting of 13 parts, referred to as Articles; nearly half of them concern the operational details of the Petro.
Article 4 of the decree describes the assets backing the new currency, stating that the Petro “is about Venezuelan oil quoted in the OPEC basket, as well as other commodities, including gold, diamond, coltan, and gas.” Moreover, each Petro “will have, as physical support, a purchase-sale contract for one (01) barrel of oil from the Venezuelan crude oil basket or any commodities that the nation decides.”
The holder of the Petro may change the market value of the crypto–asset for the equivalent in another cryptocurrency or in Bolivares at the marketexchange rate published by the national crypto–assetexchangehouse…The holder of each Petro will own a virtualwallet, which will be his [own] responsibility.
The Gazette also provides some issuance details of the Petro and hints at an initial coin offering (ICO). “The initial placement will be made through auction or direct assignment, made by the Superintendence of the crypto-assets and related Venezuelan activities,” according to Article 8.
Furthermore, the government explained in Article 9, “The custody will be decentralized once the Superintendence of the crypto-assets and related Venezuelan activities has carried out the initial auction and assigned the crypto-assets to investors.”
As for the launch timeframe, Minister of Communication and Information Jorge Rodríguez was recently quoted by local publications saying, “the first issue of the Petro cryptocurrency will be announced within days.” Then, during his year-end speech in a national radio and TV broadcast on Sunday, December 31, Maduro revealed:
In the month of January, I will be presenting all the conditions for the Petro to start operating.
Images courtesy of Shutterstock, Vpi TV, and the Financial Times.