It is about 100 million "Petro" and thus a volume of about 5.9 billion dollars. The new means of payment is to be linked to the price of one barrel of oil from the South American member state of the Organization of Petroleum Exporting Countries (OPEC), which last stood at around $ 59. Other commodities such as gold, diamonds and gas should serve as security.
According to Maduro, the country wants to use the "petro" to circumvent US sanctions, which cut off most of the country from the international financial market and freeze assets of officials. At the same time, the government wants to benefit from the boom in cryptocurrencies such as Bitcoin, Ethereum and Ripple. The idea for the "Petro" should probably have arisen in the face of speculative exploding Bitcoin course.
The virtual currency will modernize Venezuela and provide better access to real money, Maduro said. Because the country suffers from galloping inflation, the Bolivar is almost worthless. The International Monetary Fund (IMF) forecasts an inflation rate of 2,350 percent for 2018. Several rating agencies are already seeing a partial bankruptcy in Venezuela.
The "petro" would be both the first government-issued and the first commodity-backed cryptocurrency. However, the modalities of "Petro" are still completely unclear.
According to Manav Prakash, founder and CEO of the Blockchain Investment Platform It is unclear, for example, whether Venezuela can provide the technology and user infrastructure necessary for a cryptocurrency. According to him, 860,000 people have been found who mine "petro", with their devices.
As we know many cryptocurrencies based on Blockchain technology need a decentralized network of numerous users with sufficient computing power to mine the currency. This means a high power consumption at the same time. But Venezuela's economy is down: it lacks the essentials. The country is indeed rich of oil, but the promotion is on the ground. The galloping inflation is particularly harsh for those suffering from food and drug shortages.
If even foreign users will have enough confidence in the Venezuelan government for a purchase of "Petro" remains to be seen. According to economist Steve H. Hanke, a professor of applied economics at Johns Hopkins University (JHU) in Baltimore, talking to "Deutsche Welle", "Petro" is doomed to failure just because Venezuela does not have enough resources to secure the currency.
