The Venezuelan government has officially launched the pre-sale of its controversial "petro" token, according to a report.
The petro was first announced in early December 2017 by President Nicolas Maduro as a way to circumvent U.S. sanctions, amid an economic crisis and a plunge in the value of the bolivar. The token is said to be backed by commodities, including oil, of which the country has notable reserves.
According to Latin American news source Telesur, 82.4 million tokens are available initially. The president has previously said that 100 million petros will be issued, valued at over $6 billion.
President Maduro was quoted as saying in a launch announcement:
"Petro is born and we are going to have a total success for the welfare of Venezuela. ... The largest and most important companies and blockchain in the world are with Venezuela, we are going to sign agreements."
A "manual" setting out how to acquire the petro will now be available in several languages, Telesur states.
The official in charge of managing the token, Carlos Vargas, reportedly said the pre-sale and initial offering will be exchangeable for "hard currencies" and cryptocurrencies, but not the comestic fiat currency, the bolivar.
While it might make sense for a cash-strapped country to try and bring in new funding via such a token sale, the petro has been controversial from the get-go.
Venezuela's opposition-run congress declared soon after it was announced that the petro would be illegal. The legislative body argued that the issuance would effectively be borrowing against the country's oil reserves, thus violating laws setting out that congress must approve government borrowing.
Saying the scheme was "tailor-made for corruption," legislator Jorge Millan said, "This is not a cryptocurrency, this is a forward sale of Venezuelan oil."
In late January, U.S. Senators Marco Rubio (R.-Fl) and Robert Menendez (D.-NJ) also denounced the planned cryptocurrency in an open letter addressed to U.S. Treasury Secretary Steven Mnuchin.
Rubio and Menendez wrote at the time: "It is imperative that the U.S. Treasury Department is equipped with tools and enforcement mechanisms to combat the use of cryptocurrency to evade U.S. sanctions in general, and in this case in particular."
According to CNBC, Harry Colvin, director and senior economist at Longview Economics, expressed doubts about the potential success of the petro scheme.
"Venezuela has been known for misappropriation of assets in the past and the central bank has just created hyperinflation so I imagine there'll be trust and transparency issues," he told the news source.
Furthermore, should President Maduro lose the election in April, "then petros would probably be made illegitimate," he added.
Edit: This article was updated at 11:15 UTC to include additional comment.
National Assembly Building image via Shutterstock
The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at email@example.com.
Australia Warns of Fake 'Tax Collectors' Demanding Bitcoin
The Australian Taxation Office (ATO) issued a warning about would-be scammers trying to con people out of their cryptocurrency.
Since late last year, scammers have been calling Australians and impe
Bitcoin briefly falls below $8,000 after Google says it will ban cryptocurrency ads
Bitcoin prices briefly fell below $8,000 on Wednesday following news that Google, the world's largest online ad provider, plans to ban cryptocurrency advertising. Facebook, the second largest
Crypto Is a 'Crock'? Twitter Reacts to House ICO Hearing
Despite the overall measured tone among lawmakers at Wednesday's House subcommittee hearing on initial coin offerings, a few members of the panel made inflammatory statements.
Social media users re
UK Crypto Exchange to Launch Bitcoin Futures Contracts
A British cryptocurrency exchange is planning to enter the bitcoin futures market.
CoinfloorEX, a London-based exchange founded in 2013, announced Wednesday that it would launch bitcoin futures con
Congressional hearing on cryptocurrencies devolves into bitcoin bash fest
A House Financial Services subcommittee met Wednesday in what was supposed to be an overview of the cryptocurrency landscape. The two-hour hearing raised more questions than answers, and shined a
Square closes near all-time high after analyst compares stock to early days of Amazon
Shares of Square hit a new all-time intraday high Wednesday, jumping more than 5 percent after an analyst report compared the stock to 'Amazon in its early days.' Shares closed at $54.60
Bitcoin Price Sheds $800 In Drop to 1-Month Low
Bitcoin hit a one-month low on Wednesday as its price slipped below $8,300 during afternoon trading.
CoinDesk's Bitcoin Price Index (BPI) had fallen to as low as $8,287.98 as of press time, represe
Brazilian Officials Caught Using Bitcoin in $22 Million Scam
Police officials in Rio de Janerio have uncovered a money laundering scheme in which state officials siphoned off money intended for prison supplies, using bitcoin to exchange some of the proceeds.