Venezuela to Launch a New Crypto, Now Backed by Gold, After Petro Oil Pre-ICO Raised Nearly $1 Billion

Following what appears to be a successful pre-sale of oil backed Petros, the Venezuelan government now says they are to issue a new token, this time backed by gold.

According to local media, Nicolás Maduro, Venezuela’s president, announced they will launch “Petro Oro,” claiming it is a cryptocurrency “superior” to that backed with Venezuelan oil. Maduro said:

“I do not want to rush things, but we have a surprise regarding the petro and the gold, which will have the same dimension as it has been related to oil, but it is the theme of next week.”

The announcement was made during a meeting with members of a Venezuelan leftist party, in which Maduro proposed creating a Broad Front of the Homeland “to defend peace, independence of the country and to build socialism.”

Venezuela has been selling its gold since 2015 amidst a humanitarian crises caused by inflation reaching a projected 13,000% this year. But they still have the 16th largest gold reserves in the world.

Now they are apparently planning to in effect sell them through an ICO in what might be one of the more curious geopolitical game of this decade, if not century.

The ascent of money is gaining a new chapter, with desperate Venezuela so opening it after they announced a sale of $735 million oil backed Petros.

This was initially to run on ethereum, but now it appears only the token sale will do so through a smart contract. Then, it will apparently be transported to NEM, a somewhat centralized and permissioned private blockchain like network, with the planned transportation presumably because NEM might be able to currently handle higher levels of transactions than ethereum.

Who exactly bought the petros is unknown as far as we are aware, but Venezuela’s crypto regulator has stated it will attract investment from Turkey, Qatar, the United States and Europe.

The token is fully backed and fully promoted by the Venezuelan government, including its president who has tweeted partnerships with two obscure exchanges.

They are to further officially propose the petro to OPEC with the aim of creating an oil backed money, a very first since currencies were invented.

Reception is mixed within Venezuela and presumably goes by party political lines, with the opposition declaring it as illegal while the government hails it as a leap into the 21st century.

Within the crypto space reception is likewise mixed, with many arguing against supporting communism, which they argue has brought the country to its knees, while others see it as an interesting experiment, regardless of the political dimensions, which could facilitate familiarity with cryptos, and thus an easier move to global decentralized digital currencies, such as bitcoin or ethereum.

The United States government has suggested purchase might evade sanctions, but some argue it could be treated as buying oil, which does not fall within sanctions.

Around half of the token sale proceeds are to go to the government itself, with the maximum total amount being $2.5 billion. Details regarding Petro Ore, distribution, and so on, have not been provided.