Nicolas Maduro, the President of economically strained Venezuela, has called on all the 10 countries part of ALBA (Bolivarian Alliance for the Peoples of Our America) to come together in efforts for the creation of the Petro, the crude oil-backed cryptocurrency first proposed by him in 2017.
In an ALBA meeting on 12th of January, the Venezuelan President proposed the other participating countries for their support for the Petro. Calling it a 21st century project designed to foster integration of their countries, he called it a creative endeavor which needs creators in order to reach new heights.
“I put it on the table, brother governments of the ALBA, the proposal of the cryptocurrency of the Petro, so that we can take it on as one of the projects of integration of the 21st century in a bold way, but also in the manner of a creator and a creative.”
The president had declared his ambitions regarding Petro in December 2017 and had also ordered the issuance of the first 100 million Petros on 6th of January. Each Petro is backed by a barrel of oil, with Maduro setting aside 5 million barrels of Venezuelan crude oil for the currency’s launch in about 6 weeks. The currency is pre-mined and would be auctioned off to the highest bidder.
The Venezuelan Parliament, in a stark contrast, has contested Maduro’s moves. In an unanimous resolution passed on the 9th of January 2018, they declared the Petro to be an illegal currency. The Parliament has been against Maduro and his socialist party since they lost their majority in 2016 and has called on cryptocurrencies like the Petro to be fraudulent.
Venezuelan Parliament Deputy Williams Dávila, in an interview to the paper El Universal, had condemned Petro by saying that the currency only serves the interests of the rich and is designed to evade financial sanctions. He also said that the currency violated the Venezuelan constitution and has given legality to unaccounted transactions.
Venezuela is currently reeling under US and European sanctions which have crippled its economy as well as its currency, the Bolivar. The country has seen a massive rise in the usage of cryptocurrencies including Bitcoin as the public feel that digital currencies hold a greater value over the failed national currency. Some analysts have called Venezuela a Bitcoinized state owing to the high usage of digital currencies there.
While Petro seems uncertain, the idea of using digital currencies for oil trades had come up in 2016, when US-Saudi Arabia relations were at an all time low which was causing stability issues in the global oil market.