The new coin on the block is the “Petro” from guess where? Venezuela. Let’s be honest this is a stroke of genius from Maduro. The country by and large is on it’s knees. Inflation is running at the speed of light. Your average Venezuelan cannot buy anything with the Bolivar they have. To purchase anything especially food and medicine you need the US dollar, something they cannot even get hold of. The “petro” is sold in dollars. It was reported on an internet chat site someone had asked where they could buy the “Petro” with bolivars because they cannot get access to US dollars? The answer was nowhere, I’m afraid.
The way that tokens are popping up of course gives some credence to the many voices that worry the crypto bubble is going to burst. The problem is there is a lot of evidence that steady and solid ICO’s are being used to raise capital for any number of legitimate and stable projects. Yes there are some wildcards and like any venture there is serious risk if you delve too deep and step too far but there are many folks, me included that believe that this is something that needs to be explored and allowed to grow; winners and losers aside. Every new start up has risk and reward but many new developments and entrepreneurs are needed to push boundaries and come up with the solutions for tomorrow that make the risk today worthwhile.
Back to Venezuela. Under huge sanctions from the US after defaulting on several debt payments this “rich” nation under Maduro has crazily messed up the management of one of the world’s richest oil reserves. Oil production for whatever reason is at it’s lowest ever and whilst in the past citizens did get some of these riches most went elsewhere for other things a story we’ve heard many time before. From what I’ve read Maduro has no oil production and limited options to raise money to meet his mounting and continuing debt repayments. Step in the petro. Launched on the 20th February the petro was being sold at $60 per token and on the first day of trading Venezuela raised $375 million. One source said that this is the oil equivalent of 6.25 billion barrels of oil. This is DOUBLE what they produced even at peak production.
The original white paper, published on the official website of Venezuela’s government describes the process of issuing Petro. The initial disbursement will be made on the Ethereum platform as a standard ERC20 token. It also states that the Petro price will be correlated with one barrel of Venezuelan crude oil. Naturally when a country has already blundered (and plundered) it’s management of oil reserves over many years there is some scepticism because the petro is being sold ” backed by oil reserves” according to Maduro and how that converts into reality no one is yet sure or maybe Maduro and his Chief Scientific adviser, who was alongside him at the announcement, haven’t figured it out. Interestingly the country’s oil reserves belong to the “public domain.”
But as Fabiana Sofia Perera (@fabiana_sofia) said in an article in the Washington Post on the subject: Maduro might be the first autocrat to receive rents from oil without actually having to produce any of it. With apparently the US administration urged to impose a full embargo on Venezuelan oil in the near future there is more to come.