The cryptocurrency issued in Venezuela is, according to the government of Nicolás Maduro, the first launched by a State, although countries such as Estonia and Dubai have already stated that they also have similar plans.
In full fury of cryptocurrencies, led by bitcoin, and in the middle of a severe economic crisis, the socialist government of President Nicolás Maduro took a bold new decision that began to work officially on Tuesday with the pre-sale phase.
The government resorts to it as a source of financing at a time when its income has fallen due to low production and the reduction of oil prices, the main and almost only source of foreign currency to the country.
The Petro announcement reveals that before the launch of the new digital currency, Venezuela will create a token in the Ethereum blockchain and sell it. The tokens are not cryptocurrencies, as Petro will be, they are digital assets created from nothing and their value is only what people are willing to pay for them.
Most sales of tokens in Ethereum are used to raise money in order to finance the development, but the real fundraiser for Venezuela will be the public offering for the Petro itself. On the other hand, the pre-sale of chips "will promote and guarantee the demand of Petro's initial offer, which will be made later".
The idea seems to be that people will take tokens to exchange them for Petros later, when those go on sale. The "reference sale price" for the tokens will be the same as Petro's (60 USD) but a 60% discount will be applied to promote the acquisition. Basically, it guarantees Petro's demand by manufacturing a financial incentive.
It is known that Petro will have a limited number of currencies, such as Bitcoin. In addition, on its first date, 38.4% of the first cryptocurrencies will be issued, equivalent to 2.3 billion dollars. And a month later, another 44% will be issued, the equivalent of 2,700 million dollars. In total, there will be 100 000 million petros and there will be no extraordinary emissions.
The Venezuelan government will accept Petros as payment for taxes and public services, and will provide financial incentives for merchants in the country to adopt Petro. The government also sees Petro blockchain as an information platform, very similar to how the Bitcoin blockchain can be used to host or track public records.
Despite the optimism of the Maduro government, the complexity of having a pre-sale token supporting an ICO (Initial Coin Offering, a method used to raise funds in cryptocurrencies in order to finance a project), which is then supported by the oil reserves, casts an aura of doubts about Petro's viability.
Already in the past Venezuela has lived a golden age financed at the expense of the abundant oil that the Caribbean nation has. Nothing makes you believe that things will change this time, especially if you have such a poor and corrupt administration.
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