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.
Momentum Is Building to Block Ethereum ASICs
Several ethereum miners and developers have come forward with the goal of stopping specialized mining hardware from effectively operating on the network.
Underway since April, the controversy surro
Brazil's Largest Independent Broker Is Launching a Crypto Exchange
The parent company of Brazil's largest independent broker is setting up a cryptocurrency exchange, Bloomberg reported Thursday.
Grupo XP, which owns brokerage firm XP Investimentos, plans to launch
XRP Shot Up 75% During Friday's Bullish Trading Session
The price of XRP spiked as high as 75 percent above its opening price at one point during Friday's trading session amidst a broader market bull parade.
At roughly 14:45 UTC, the price of XRP rose
US Congressman Drafts Bills to Aid Blockchain Development
U.S. Representative Tom Emmer wants to support the development and use of blockchain technology and cryptocurrencies.
To that end, the lawmaker announced a trio of blockchain-focused bills Friday,
Report Finds Cryptojacking Instances Jumped 400% In A Year
Instances of cryptojacking malware have jumped more than 400 percent since last year, a new report finds.
A collaborative group of cybersecurity researchers called the Cyber Threat Alliance (CTA) p
Bitmain CEO Announces New 7nm Bitcoin Mining Chip
The bitcoin mining industry is having an exciting couple of days.
Just a day after Bitfury revealed a new 14nm mining chip called the Bitfury Clarke, Bitmain has upped the ante with the announcemen
Brave Browser Is Using Civic's Blockchain Platform to Verify Publishers
Privacy-focused internet browser Brave will begin using blockchain identity startup Civic's verification services to ensure publishers are paid for their content with Brave's Basic Attention Token (BA
US Navy Launches Blockchain Research in Mission to Improve Tracking System
A U.S. Navy command is exploring the potential of blockchain technology in tracking aircraft parts.
The Naval Air Systems Command (NAVAIR) – which provides material support for aircraft and airborn