The president of the Bolivarian Republic of Venezuela, Nicolás Maduro Moros announced via a joint radio and television broadcast the activation of the Petro (PTR) as an exchange currency for the Republic’s international commercial activities, starting October 1 across the country:
” This #24Sep will be set up in the test phase, the new #Biopayment System for the charging of fuel in all service stations, and on #01Oct the Petro will be effective as convertible currency in the country.
According to the frequent statements of Mr. Maduro and other high ranking representatives of the Venezuelan government, all the necessary details to guarantee the implementation of this “new stage” of the Petro as possible national use crypto are already in place.
El próximo #24Sep se instalará en fase de prueba, el nuevo Sistema de #Biopago para el cobro del combustible en todas las estaciones de servicio, y el #01Oct entrará en vigencia el Petro como moneda de intercambio de divisas convertibles en el País. pic.twitter.com/lZki37B4Ak
— Nicolás Maduro (@NicolasMaduro) September 21, 2018
Few data have been revealed about the cryptocurrency because of strategic reasons. Many of the actions that the government is undertaking have been carried out with a certain caution to avoid possible counter-actions that could hinder the fulfillment of the established goals.
U.S. sanctions on Venezuela are not exclusive to the country described by President Trump as a authoritarian government. People in other nations such as China and Russia have also received similar sanctions. In an interview for Business Insider, Luisa Palacios, the head of Latin America at advisory firm Medley Global Partners commented that said penalties increase the risks not only for strategic industries but for any economic activity in which Venezuela is a party:
“The sanctions have just elevated significantly the risk of any counterparty of dealing with Venezuela because then you have to check whether are you going to be in violation of sanctions.
Petro (PTR): What It Really Is
Little is known about Petro, beyond what is established by the Decree Law of its creation and the final version of its whitepaper:
According to Decree No. 3196 dated December 8, 2017, the Petro is a token that “will have, as a physical backing, a sales contract of (01) barrel of oil from the Venezuelan crude oil basket …”.
It is important to note that many opposition spokespersons have considered this an illegal act as they allege that oil reserves cannot be sold, however, the practice of futures contracts is widespread in the oil and commodities market in general, and Venezuela is familiar with this practice.
After its creation, the National Assembly issued an memorandum in which they ruled that the decree was null and void, even though this atribution falls under the jurisdiction of the Supreme Court of Justice through an appeal for nullity.
It is also important to note in the Venezuelan power game that the Supreme Court of Justice declared the National Assembly null and void for refusing to execute a binding ruling. The sentence is still valid because the National Assembly has refused to comply with that obligation.
According to its Whitepaper, the Petro (PTR) will be a mosaic running under the NEM network, will have a fixed issue of 100 million tokens, its value will fluctuate in a secondary market according to the market price and may be bought and exchanged for fiat money in exchanges duly certified for that purpose.
Also in search of controlling the accelerated inflation that the country lives, the government anchors the minimum wage to a value of 0.5 PTR, which is the equivalent to half the cost of a barrel of oil in dollars, eliminating the exchange control that existed since the time of Hugo Chavez. In this way, the government pretends that the salary in bolivars adapts to the value of the dollar maintaining a certain stability.
Until now no further details have been given about the way of implementation or the rest of the “stages” of this plan; however it is expected that in the course of the days more information will be published.