A decree has been published by the government of Venezuela in regards to the operation of its exclusive cryptocurrency termed as Petro. The decree includes the government’s plans regarding the cryptocurrency in aspect of its issuance, trading and mining. Petro will be backed by 5 Million barrels of crude oil.
Nicolás Maduro the president of Venezuela had announced that the value of its indigenous cryptocurrency shall be backed up by 5.3 billion barrels of crude oil having a whopping value of $267 billion. He revealed the idea behind launching Petro in early December. He has shown a “document formalizing the provision of the certified Ayacucho oil field, No.1 in the Orinoco Petroleum Belt, for the support of El Petro cryptocurrency,” during a weekly TV and national radio broadcast.
Maduro had confirmed that:
“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”
He also added that “every single Petro will be backed by a barrel of oil.” The publication noted that the president had also “promised to allocate Arco Minero gold deposits from the Orinoco Belt along with the country’s diamond deposits” to the Petro. The creation and operation of Petro shall be looked after by the National Blockchain Observatory and the Cryptocurrency Superintendency.
Trading and Issuance Plans of Venezuelan Cryptocurrency
The Gazette published by the Maduro government has outlined a decree sub-divided into 13 parts which are referred to as Articles. Almost half of them speak about the operational intricacies of the Petro currency.
- Article 4 states that Petro “is about Venezuelan oil quoted in the OPEC basket, as well as other commodities, including gold, diamond, coltan, and gas,” while throwing light on the assets which shall be backing this nascent currency Petro each of which “will have, as physical support, a purchase-sale contract for one (01) barrel of oil from the Venezuelan crude oil basket or any commodities that the nation decides.”
- Article 5 focuses on the nature of wallets which shall be used for holding the Petro currency and its convertibility by stating that, “the holder of the Petro may change the market value of the crypto-asset for the equivalent in another cryptocurrency or in Bolivares at the market exchange rate published by the national crypto-asset exchange house…The holder of each Petro will own a virtual wallet, which will be his [own] responsibility.”
- Certain issuance details in regards to Petro has been provided by the Gazette hinting at the regulated operation of initial coin offerings (ICO). As per Article 8, “the initial placement will be made through auction or direct assignment, made by the Superintendence of the crypto-assets and related Venezuelan activities.”
- Article 9 lays down that, “the custody will be decentralized once the Superintendence of the crypto-assets and related Venezuelan activities has carried out the initial auction and assigned the crypto-assets to investors.”
Regarding the launch timeframe, Jorge Rodríguez the Minister of Communication and Information revealed that, “the first issue of the Petro cryptocurrency will be announced within days.”
Maduro added to this topic by stating that, “in the month of January, I will be presenting all the conditions for the Petro to start operating,” while giving his year-end-speech at a TV and national radio broadcast on the last day of 2017.
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