Content adapted from this Zerohedge.com article : Source
Four months ago, in a not entirely surprising move meant to circumvent US economic sanctions on Venezuela, president Nicolas Maduro announced that his nation would stop accepting dollars as payment for oil imports, followed just days later by the announcement that in a dramatic shift away from the Petrodollar and toward Beijing, Venezuela would begin publishing its oil basket price in Chinese yuan. The strategic shift away from the USD did not work quite as expect, because a little over two months later, both Venezuela and its state-owned energy company, PDVSA were declared in default on their debt obligations by ISDA, which triggered the respective CDS contracts as the country's long-expected insolvency became fact.
Then, in early December, clearly fascinated and captivated by the global crypto craze, Maduro shocked the world by announcing the creation of the "Petro", Venezuela's official cryptocurrency "to advance in the matter of monetary sovereignty, to make financial transactions and to overcome the financial blockade".
Nicolas Maduro dances with supporters in Caracas, Venezuela, December 1, 2017
"The objective is to advance in the Venezuelan economy and overcome the financial blockade, this allows us to continue in the economic and social development supported by Venezuelan riches," said the president, explaining that his government will make a cryptocurrency issue "backed by reserves of Venezuelan gold, oil, gas and diamond wealth."
Still, as we said when he first commented on Venezuela's bizarre foray into digital currencies, "it was not exactly clear how this PetroCoin would be backed by various natural resources when the whole point of cryptos is that they are not backed by anything, and as such it appears that what Maduro is trying to do is admit that the hyperinflating Bolivar has failed as a sovereign reserve, and the country is hoping to confuse its global trading partners enough into believing that it somehow had a new "bitcoin" on its hands, which like the real thing would then proceed to appreciate in value in the near future.
Today we got the answer when Venezuela's president announced that "every single Petro will be backed by a barrel of oil... and gold."
"The objective is to advance in the Venezuelan economy and overcome the financial blockade, this allows us to continue in the economic and social development supported by Venezuelan riches," said the president, explaining that his government will make a cryptocurrency issue "backed by reserves of Venezuelan gold, oil, gas and diamond wealth."
Some joked at the time that a different name might be more suitable...
You sure he didn't say 'KLEPTO-currency'? https://t.co/Mm2yNqqFGq
— Wild Goose (@TrueSinews) December 3, 2017
But now, as RT reports, Maduro confirmed the backing of the national cryptocurrency Petro with the country's vast natural resource reserves.
"Here's the document formalizing the provision of the certified Ayacucho oil field No.1 in the Orinoco Petroleum Belt for the support of El Petro cryptocurrency," Maduro said on national TV.
Maduro said the field's "reserves amount to five billion barrels of oil," which is confirmed by the corresponding "international certificate."
"Every single Petro will be backed by a barrel of oil," Maduro said, promising to provide cryptocurrency mining throughout the country.
"We will set up a special team of cryptocurrency specialists so they will be engaged in mining in all states and municipalities of our country."
The Venezuelan leader has also promised to allocate Arco Minero gold deposits from the Orinoco Belt along with the country's diamond deposits.
The Venezuelan president explained the purpose was "to advance the country's monetary sovereignty, to carry out financial transactions and to defeat the financial blockade against the country."
"We are facing a financial war against the country which we have denounced, and the opposition has denied. There are business people who are unaffected by Donald Trump's blockade. With this, we will join the 21st century," said Maduro.
Finally, as Pepe Escobar concluded recently, it ain't over till the fat (golden) lady sings. When the beginning of the end of the petrodollar system – established by Kissinger in tandem with the House of Saud way back in 1974 – becomes a fact on the ground, all eyes will be focused on the NSS counterpunch.
The fact that Government is creating cryptocurrency makes it against the crazy crypto boom a bit odd. One of the most attractive characteristics of cryptos is the decentralization, which means they are not regulated by official authorities.
Funny that the government wants to get rid of the best part!
A point completely lost on the authorities.
I heard this news that president Nicolas Maduro announced that his nation would stop accepting dollars as payment for oil imports, followed just days later by the announcement that in a dramatic shift away from the Petrodollar and toward Beijing, Venezuela would begin publishing its oil basket price in Chinese yuan. The strategic shift away from the USD did not work quite as expect, because a little over two months later, both Venezuela and its state-owned energy company.
Venezuela never said that it would not accept dollars for petroleum imports, that would be suicide, because the main buyer of Venezuelan oil is the United States, and it is the only one that truly pays for oil. Since the oil that Venezuela sells to Russia and China are sent as payments of debts already spent.
Maduro said he would accept to be paid the oil with other currencies, in addition to the dollar. But nobody will pay Venezuela with other currencies because as I said before, China and Russia are not paying them for oil, and India is reducing its purchases to the Venezuelan market more and more.
The only interesting thing about this is that countries are pissed off by the behavior of governments.
People think government coins will mean anything...they wont. The entire premise is decentralized, open source tokens that are not under the control of any entity. A government coin is not decentralized and is controlled by said government. Therefore, it is worthless.
100% agreed. They only want to use it to control people and steal from investors
I am Venezuelan, I do not believe that the people who are behind this project are reliable. The Venezuelan government does not have the capacity to do anything competently. All the pages of the government are hacked constantly, the oil industry has increased labor accidents due to carelessness and lack of maintenance, in several states of the country there is no water service and electricity due to lack of maintenance. What will prevent the inefficiency from compromising the security of your money? then the government will only say that it is a sabotage of the empire or of the opposition. These people will not only centralize the crypto, but the whole process is compromised due to its negligence.
Copying/Pasting full texts of articles from known internet personalities without their consent, and without adding anything original is frowned upon by the community.
www.zerohedge.com has confirmed that they have not given any permission for their content to be reused for profit.
Some tips to share content and add value:
Repeated copy/paste posts could be considered spam. Spam is discouraged by the community, and may result in action from the cheetah bot.
If you are actually the original author, please do reply to let us know!
Thank You!
More Info: Abuse Guide - 2017.
In the next few years as most of the current fiat systems start to crumble, I expect to see a wide range of governments around the world to start creating their own national level cryptos as a replacement for their failing financial systems. With this something ELSE will be required to be used for international trade (as national level cryptos will only be used INSIDE each specific country, and outside that country will have no value). Bitcoin could very easily become this "international trade" currency in the future (a crypto that holds equal value across all borders, and is accepted as value across all borders), and what Venezuela is currently doing (backing their BTC with tangible commodities of value) is likely to be a growing trend throughout the globe in the coming years as we start to move towards this 2 tier (national level + international level) crypto-based financial system.
I expect that too although I dont know what the difference will be.
A country is not going to set up a decentralized currency. That would mean it loses control. Instead, they might set up a crypto they control which isnt much different than what we have today. The USD is basically a digital currency anymore.
I wont be buying this alt coin that's for sure. Backed by oil AND trust that they will deliver on their promises
I have read the news.Its great that Venezuela will back Its Cryptocurrency With 5 Billion barrels Of Oil, Gold Deposits. Clapping for the Venezuelan president. Because The governments creates a new currency instated cryptocurrency. ...But It only for internal may be. Thank you sir for sharing the news. I want to earn money with bitcoin. And always thanks to you because by your post I am learning about cryptocurrency more and more.
This is certainly an interesting development on the part of Venezuela. Perhaps this is their way of demonetizing their currency (does Zimbabwe ring any bells?) without officially demonetizing. I would not be surprised to see them exhibit more governmental favorably towards PetroCoin. Definitely something to keep an eye on as it progresses.
You know, speaking of Zimbabwe, they seem like a good opportunity/case study to develop common/normalized usage of cryptocurrencies in its citizens'daily lives.
Anyways, when will CoinMarketCap.com list it and how soon can we begin trading for them on Binance/Bittrex?
I wonder what @xondra would have to say on this matter. Would love to hear her opinion. Since @Xondra's got boots on the ground, maybe she knows the full story.
Thanks for your valuable reply. Waiting for listing.
thanks a lot for sharing and discuss about bitcoin..bitcoin is my best coin..cause my 1st earning site is bitcoin..i like this your creativity..best of luck..resteemit done..
hlw dear sir @zer0hedge nice crypto news sharing & thank you so much for sharing with us.
Would you like to give upvote :)
Disclaimer: I am just a bot trying to be helpful.
The dollar death march
D*mn hard enough promoting crypto now we got the government using it as a way to get out of debt. When this fails the naysayers of crypto will point this as another example why crypto is worthless. I guess the positive to this is I hope to catch the bottom and buy a ton of cryptos when the day comes.
Currencies should be backed by all commodities, not just gold.
Great work by them. Hopefully the government isn't confiscating these materials from the people to do this.
going crypto was a smart move to go around the U.S. blockade and a good incentive to the crypto world, the question is do they have a good block chain to support it or they will build it on top of one of the existing ones
I think it is safe to say that Russia has played it's cards pretty well.
Thanks for Your Great News Of Cryptocurrency @zer0hedge
How does this "backing" really work?
Would you be interested in buying and supporting a cryptocurrency of that nature?
I've examined Venezuela has had difficult instances with an awful economic basis and extreme inflation in the beyond few years. blockchain has already brought incredible adjustments to the world, and assisting a country's crippling economy upward push again is one greater extra accomplishment to this era's track document. I'm hoping petrol can be released efficaciously without any politics involved.
I have not studied about petrol. however, if it were to be implemented, I'm hoping they could work something with the delivery so that the buying strength of petrol is not that volatile as btc's. speed and transaction problems must additionally be taken into consideration as petro will be used for everyday transactions just like fiat.
thanks @zer0hedge
Any currency is going to be volatile until the backing agency is on solid ground.
The challenge with the oil crypto is it is being backed by VZ...a country shown to not be very good at protecting its currency. Money mismanagement is still the same.