Venezuelan President Nicolas Maduro has said that the country will sell oil and part of the gold it produces for its national cryptocurrency petro.
“We will sell Venezuelan oil in exchange for petros. We have already signed contracts for the sale of oil, steel, iron and aluminum, and we will sell part of the gold for petros,” Maduro told Venezuelan newspaper El Nacional, as reported by Russian news agency TASS.
According to Maduro, the Venezuelan government is successfully introducing its cryptocurrency into citizens’ daily lives. He said that at least 6 million families in Venezuela have used petro as a payment method to purchase goods and services during the New Year holidays. The #PetroApp hashtag was also reportedly trending yesterday on Twitter in Venezuela.
Petro was announced in Oct. 2017, and its sales began in Feb. 2018. According to TASS, the price of one petro is equal to the price of a barrel of oil in Venezuela (WTI crude price is currently at around $63).
As petro is pegged to the price of oil, Maduro recently said that Venezuela would back the cryptocurrency with some 30 million barrels of crude oil sitting in the country’s storage tanks. The figure, however, is drastically down from 5 billion barrels announced at the time of the petro launch in Feb. 2018.
Some Time in 2019…
Venezuela President Nicolas Maduro has said that the country’s government will activate a cryptocurrency payment method for citizens “very soon.”
The method will enable new instruments for “free national and international payments” allowing everyone to conduct banking transactions, Maduro said in a televised press conference, as reported by Bloomberg.
“The finance minister and Venezuela’s central bank have new instruments which we will activate very soon so that everyone can do banking transactions, as well as national and international payments through the central bank’s accounts. Venezuela is working within the cryptocurrency world,” Maduro said.
Venezuela Plans on Adding Bitcoin to it Reserves
In September 2019, there were reports that the central bank of Venezuela was exploring adding cryptocurrencies, specifically bitcoin (BTC) and ether (ETH), to its international reserves.
The central bank of Venezuela is running internal tests to determine whether it can add cryptocurrencies, specifically bitcoin and ether, to its international reserves, according to a report by Bloomberg.
The test came at the request of Petroleos de Venezuela SA (PDVSA), the state-owned oil and natural gas company. PDVSA is looking to have the Venezuelan central bank pay the company’s suppliers on its behalf using the bitcoin and ether it has obtained.
Due to U.S. sanctions, PDVSA has struggled to do business with its clients and suppliers, as major banks have avoided opening business channels with the company. According to Bloomberg, it is unclear how PDVSA was able to get a hold of its bitcoin and ether. The value of its holdings is also unclear.
In 2018, the Venezuelan government launched Petro, a state-issued cryptocurrency backed by the country’s oil reserves. More recently, government officials have launched various platforms to incentivize the use of Petro.