Crisis-wracked Venezuela is proceeding with a “pre-sale” of its proposed cryptocurrency, saying the “petro” will help fuel the country’s economic recovery.
Critics have called the petro illegal and “tailor-made for corruption.” But Venezuelan President Nicolas Maduro said Tuesday that the petro pre-sale will begin Feb. 20, asking investors to “have faith in what we’ve created and in the technological and intellectual capacity of our country.”
The petro is designed to be backed by Venezuela’s oil reserves, with one token equalling one barrel. That would give the entire 100 million supply of petros a market value of almost $6 billion.
According to Maduro, mining centers are being set up at educational institutions to produce the token. “The petro will have a great impact in how we access foreign currencies for the country and in how we obtain goods and services that we need from around the world,” he said on state television.
The OPEC nation unveiled the digitial currency last month, with Maduro soon appointing Carlos Vargas as “Superintendent of Cryptocurrencies.” The national currency, the bolivar, has been devalued amid Venezuela’s crippling crisis and the government is hoping the petro will help it raise hard currency.
The Venezuelan opposition called the petro a “fraud,” saying it is illegal to use oil reserves to back debt, while the U.S. Treasury Department has warned the cryptocurrency could violate sanctions against the country that bar the purchase of newly issued Venezuelan debt.
“The petro digital currency would appear to be an extension of credit to the Venezuelan government … [and] could therefore expose U.S. persons to legal risk,” a Treasury spokesman said.
Two U.S. senators — Florida Republican Marco Rubio and New Jersey Democrat Robert Menendez — have asked Treasury Secretary Steven Mnuchin to take steps to prevent Venezuela from using the petro to bypass U.S. sanctions.
“It is imperative that the U.S. Treasury Department is equipped with tools and enforcement mechanisms to combat the use of cryptocurrency to evade U.S. sanctions in general, and in this case in particular,” they wrote in a letter to Mnuchin.