As an alternative to dismantle the dependence on the dollar, beat hyperinflation (which ended 2017 with an index of 3,000%) and in a sort of dribbles on the economy due to the blockades and sanctions of the United States to Venezuela, President Nicolás Maduro in December announced the launch of a national cryptocurrency.
The value of the Petro will be supported by the country's gold, gas, oil and diamond reserves. The Venezuelan government accompanies the initiative with the creation of the Venezuelan Cryptocurrency Superintendence, which will be the body in charge of dealing with all the issues related to Petro, together with the Blockchain Observatory of Venezuela.
The Superintendent of Cryptocurrencies and Related Activities in Venezuela, Carlos Vargas, assured that the country has 5 billion barrels of oil (US$ 300 billion according to the current market price in January) that support the currency. The expectation is that the Petro is used internally for transactions of goods and services in the country.
Investors will have the possibility of buying a derivative in international exchanges that represents the value of the raw material they want to acquire. And in those cases there will be intermediation costs. In a first stage, the currency will be exchanged through auctions that the State will carry out and in foreign currencies. Later it will be possible to buy it in bolivars, by means of secondary markets as exchange houses.
Although the Petro will not be mined, it is the same Superintendence that will be in charge of granting the licenses to mine the rest of the cryptocurrencies, a business that looks profitable in a country where electricity is subsidized and there are already about 100,000 miners working that can make a profit of up to US$ 800 per month. The activity generates between US$ 80 and US$ 100 million per month in the country. The registration of the miners in the registry will allow Venezuela to regulate the activity and tax it in the future.
But international markets are skeptical about the Petro and they transfer the lack of confidence that exists towards Venezuela to the currency. In addition, the US Treasury Department warned that those who operate with the currency may be exposed to legal risks.