Venezuela: Petro Cryptocurrency to Be Sold to Private Exchanges

Venezuelan Vice-President Tareck El Aissami announced that the country's Dicom foreign exchange will begin auctioning its new cryptocurrency, the Petro, to private companies. “The Petro is going to be auctioned on Dicom,” El Aissami said during a meeting with businessmen broadcast on television.

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He noted that companies will be able to pay for imports of raw materials with Petros and encouraged local banks to invest in the new digital coin at a discount rate during the preliminary phase, which ends on March 20, according to Reuters. “The Petro is going to be our powerful international currency, above the dollar.”

El Aissami reiterated that during the preliminary phase, “dollars, euros or any other currency” can be used to purchase the Petro and the cryptocurrency can be accrued by banks as assets on their balance sheets.

On Feb. 20, Venezuela officially launched the Petro, the first cryptocurrency backed by oil reserves. Venezuelan President Nicolas Maduro said the goal of the digital coin is to combat sanctions and the "economic war" waged by the United States government and its junior partners against his country and advance "on issues of monetary sovereignty, to make financial transactions and overcome the financial blockade."

Democratic U.S. Senator Bob Menendez and his Republican counterpart, Marco Rubio, have co-authored a letter denouncing the Petro, and requesting that the U.S. Treasury Department closely monitor its progress. The lawmakers also made suggestions on measures the agency can take to undermine the success of the digital currency.

For its part, the U.S. Treasury Department stated the Petro is a currency with characteristics that “appear to be an extension of credit to the Venezuelan government" – a measure forbidden by U.S. sanctions - and that "U.S. persons that deal in the prospective Venezuelan digital currency may be exposed to U.S. sanctions risk."

The Petro has attracted attention from investors in several countries, including Saint Vincent and the Grenadines, China, Palestine, Japan, Turkey, Qatar and even the United States.