Venezuela launches cryptocurrency

The government of Venezuela has launched what it claims to be the first state-backed cryptocurrency, called Petro. The period of pre-sale for Petros was officially open on 20 February 2018. The government plans to offer 100 million units of the cryptocurrency, which is backed by the countries’ oil assets and use the oil barrel as a reference for its price. During the pre-sale period, 38,4 million units will be offered, and another 44 million will be available as of next month, through an initial coin offer (ICO). The technical community raises concerns about the feasibility of the project, pointing out that the government has not properly structured it. Initially, an official white paper indicated that the tokens for the pre-sale would be available through the Ethereum blockchain platform. However, a day after this paper was released, and when the pre-sale period was already open, the white paper had changed that information to indicate that the NEM blockchain platform would be used. The national opposition criticises the initiative, arguing that the strategy is merely a way to offer bonds and increase the public debt while circumventing the necessary authorisation from the Parliament to do so. The US Treasury Department has also issued a warning that the initiative appeared to be a way to extend credit to the government of Venezuela, and breach and get around the sanctions imposed on the country, which could represent legal risks for the people that eventually decide to invest on it.