Published: Wed, February 21, 2018
World | By Paul Elliott

Venezuela says launch of 'petro' raised $735 mil.

Venezuela says launch of 'petro' raised $735 mil.

The tokens are each created to be valued at and backed by a barrel of Venezuelan crude oil.

The Venezuelan president said on Twitter that the petro token raised more than 4.777 billion Chinese yuan, or $735 million, and that the state-backed virtual currency "reaffirms our economic sovereignty".

Venezuela formally launched its new oil-backed cryptocurrency on Tuesday in an unconventional bid to haul itself out of a deepening economic crisis.

Venezuela's cryptocurrency, El Petro (PTR), has allegedly raised $735 million on the first day of the pre-sale February 20, reports Reuters, quoting claims of the country's president Nicolas Maduro.

Bitcoin and other digital tokens are already widely used in Venezuela as a hedge against hyperinflation and an easy-to-use mechanism for paying for everything from doctors*visits to honeymoons in a country where obtaining hard currency requires transactions in the illegal black market. Maduro hopes that oil will allow the affected OPEC member to compensate the United States sanctions, while the currency Bolivar is falling to record levels, and the country is struggling with hyperinflation and a collapsing socialist economy.

Venezuela's currency is the world's first government cryptocurrency.

Maduro did not give details about the initial investors and there was no evidence presented for his figure.

However, the blockchain experts have warned that this move is most unlikely to attract any significant investment.

Maduro made this comment about the Petro: "a cryptocurrency is being born that can take on Superman". This decision is taken in an attempt to coubter economic sanctions imposed by the U.S. government. Opposition leaders have said the sale constitutes an illegal debt issuance that circumvents Venezuela's majority-opposition legislature, and the US Treasury Department has warned it may violate sanctions levied past year.

Venezuelan Cryptocurrency Superintendent Carlos Vargas last week said the government was expecting to draw investment from investors countries including the U.S. and Europe.

Some US lawmakers have also expressed concerns about petro, and asked the country's Treasury Department in January to monitor and restrict the currency.

According to Petro's whitepaper, a total of 82.4 million tokens are available for the pre-sale phase.

The white paper notes that the tokens sold at pre-sale are actually assets on the NEM blockchain and not the tokens that will function on the Petro network.

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