Update: Venezuelan state issued crypto to be backed by oil, gas, gold & diamond

[Hydrogen]

Venezuela will launch a pre-sale of its commodity-backed "petro" cryptocurrency on Tuesday.

President Nicolas Maduro hopes the country's own digital currency will help it to make financial transactions and get around Western sanctions.

Both the United States and the European Union have imposed economic sanctions on Venezuela over their opposition to its autocratic government. Last year, the Economist Intelligence Unit's Democracy Index downgraded Venezuela from a "hybrid regime" to an "authoritarian regime" due to its "continued slide towards dictatorship."

Venezuela's petro token will be backed by its oil, gas, gold and diamond reserves, according to the government. The country's cryptocurrency regulator said Friday that it would draw investment from Qatar, Turkey and other Middle Eastern countries, as well as from European nations and the U.S.

The petro will not be available in the Venezuelan bolivar initially. Venezuela's own hard currency collapsed as the South American state grappled with crippling hyperinflation.

Caracas has attracted a number of skeptics as it gears up to launch its cryptocurrency pre-sale.

Many doubt its digital currency venture will bring much benefit to either Venezuela's economy or its people, who are suffering shortages in food and medicine due to price controls.

Francisco Toro, a Venezuelan journalist, political scientist and blogger, said that Venezuela was turning to cryptocurrency out of "desperation" because of its economic isolation from the United States.

"They have been trying to figure out ways to get around anti-money laundering sanctions provisions, and crypto is maybe one way they can do that," Toro, who is editor of the blog Caracas Chronicles, told CNBC in a phone interview Saturday.

"I do think that part of this is about getting investors from non-traditional lenders, from Russia and China, to put in some more money, to lend fresh cash. The financial sanctions — the U.S. sanctions, the European sanctions — are not the main reason Venezuela can't raise financing. The main reason Venezuela can't raise financing is that macroeconomic finance is a s--- show."

As well as quadruple digit inflation, Venezuela has been facing an oil production collapse. Venezuelan crude production fell 29 percent in 2017. Many fear the accelerated fall in Venezuela's oil output will increase the likelihood of it defaulting on its debts.

Toro said that Venezuela's economic woes have given it a bad credit reputation and that the government was trying to convince itself of the validity of chavismo, the left-wing political ideology established under former President Hugo Chavez.

"This idea that sanctions are hemming demand, that they need to need to get around sanctions, this is chavismo drinking their own Kool Aid and believing their own propaganda."

'Desperation breeds innovation'
But one analyst thinks the petro is an "excellent idea" and could serve as a precursor to similar projects from other world leaders, including Russian President Vladimir Putin.

"Putin and Maduro have very similar problems," Mati Greenspan, senior market analyst at social trading firm eToro, told CNBC in an email last week. "They both have a high dependence on the price of crude oil, which has been rather unstable in the last few years. They both have issues with U.S. sanctions and with the U.S. dollar being the world reserve currency."

He added: "To think that of all the governments and banks who are toying with the idea it would be Nicolas Maduro who gets there first. I suppose desperation breeds innovation."

Reports have emerged in recent months of Russia considering a digital version of its own currency, the rouble. Russia's "cryptorouble" could be used as a means for the country to circumvent Western sanctions, a report in the Financial Times said last month, echoing Maduro's own plans for Venezuela's petro token.

CNBC contacted the Russian government's press office for comment but a spokesperson was not immediately available.

Greenspan gave praise for the country's plan to back petro tokens with its commodity reserves. Maduro has said petro tokens will each be pegged to the price of one barrel of Venezuelan oil.

"It's an excellent idea to back the crypto with a hard commodity as the world is currently flooded with baseless money," he said. "Surprisingly, we've seen very little support for this initiative in the crypto community, most likely because it seems the Venezuelans themselves don't seem to have made up their minds just yet."

Greenspan added: "In any case, I believe that the petro is actually targeting more institutional investors and other governments. They have more to spend then the crypto-billionaires anyway. No matter what happens, this is going to be an excellent pilot for Putin."

Toro, however, expressed severe doubt that other countries — especially Russia — would look to Venezuela's cryptocurrency for inspiration for their own projects experimenting with the technology.

"There is a science establishment in Russia," Toro said, adding, "If Russia is going to launch a crypto, they are not going to copy some banana republic. It's ridiculous. It's totally silly. I do think it's mostly noise."

An expert on cryptocurrencies said he was "not fully convinced" that the petro's backing in oil and mineral reserves would live up to expectations.

"This is basically an E&P (exploration and production) play from the traditional oil and gas market with a large dose of sovereign risk and room for manipulation," Charles Hayter, chief executive of cryptocurrency comparison site CryptoCompare, told CNBC in an email.

Countries hit with sanctions are not alone in considering the possibility of their own digital currency. Many around the world are mulling the idea of virtual currency.

Sweden, for example, is looking into the possibility of a digital version of the Swedish crown, the "ekrona." Cash use in the Scandinavian country has steeply declined in recent years.

Others, including Japan, Singapore and Estonia, are also considering such digital alternatives to hard currency.

https://www.cnbc.com/2018/02/19/venezuela-petro-cryptocurrency-pre-sale-starts-february-20.html

More details on venezuela's petrocrypto emerge.

• Venezuela will launch a pre-sale of its commodity-backed "petro" cryptocurrency on Tuesday(today?)
• Backed by oil, gas, gold & diamond
• "Backed by oil" may not mean much as Venezuelan crude production fell 29 percent in 2017
• Venezuelan petrocrypto may be an attempt to avoid economic sanctions by the USA and EU

I would also like to contend that currencies being gold backed no longer matters in this day and age. There's no relevent difference between electronic money in a cashless society or bitcoin. Its all printed out of thin air and "baseless money". 

Greenspan gave praise for the country's plan to back petro tokens with its commodity reserves. Maduro has said petro tokens will each be pegged to the price of one barrel of Venezuelan oil.

"It's an excellent idea to back the crypto with a hard commodity as the world is currently flooded with baseless money," he said.

[bitcoinblog]

I don't think they will launch , it was just a threat for US and was a " Dialogue "  by President.

He want to threat US that he will stop using US Dollar in business and start his own Cryptocurrency. I don't think he was serious.

[Lieldoryn]

Oil is traded on world markets only for dollars. I don't believe Venezuela can give up the dollar. The main pair of trading in the cryptocurrency market is BTC / USD. Therefore, cryptocurrencies can't help giving up the dollar either. It seems to me that to restore Venezuela's economy, it is necessary to make sure that the government does not steal. This will have a greater effect than giving up the dollar.

[Hydrogen]

Oil is traded on world markets only for dollars.

It is true that before 2017 things were 100% that way for a long time.

In 2017 however china (being the largest importer of oil in the world) announced plans for oil transactions to be denominated in the yuan (china's native currency):

China has grand ambitions to dethrone the dollar. It may make a powerful move this year

China is looking to make a major move against the dollar's global dominance, and it may come as early as this year
The plan is to price oil in yuan using a gold-backed futures contract in Shanghai, but the road will be long and arduous

China is looking to make a major move against the dollar's global dominance, and it may come as early as this year.

The new strategy is to enlist the energy markets' help: Beijing may introduce a new way to price oil in coming months — but unlike the contracts based on the U.S. dollar that currently dominate global markets, this benchmark would use China's own currency. If there's widespread adoption, as the Chinese hope, then that will mark a step toward challenging the greenback's status as the world's most powerful currency.

China is the world's top oil importer, and so Beijing sees it as only logical that its own currency should price the global economy's most important commodity. But beyond that, moving away from the dollar is a strategic priority for countries like China and Russia. Both aim to ultimately reduce their dependency on the greenback, limiting their exposure to U.S. currency risk and the politics of American sanctions regimes.

The plan is to price oil in yuan using a gold-backed futures contract in Shanghai, but the road will be long and arduous.

"Game changer it is not — at least not yet," said Gal Luft, co-director of the Institute for the Analysis of Global Security, a Washington based think tank focused on energy security. "But it is another indicator of the beginning of the glacial, and I emphasize the word glacial, decline of the dollar."

Beijing faces skeptical global oil markets and global perceptions it exerts too much state control. Those factors will hinder its drive to build a viable oil pricing benchmark that's able to compete with more established benchmarks like West Texas Intermediate or Brent (both dollar-denominated).

The architects of the "petro-yuan" face an uphill struggle in dislodging the "petrodollar" and, with it, more than four decades of U.S. dollar-priced oil. Attracting interest from entrenched and active markets in Europe, the U.S. and the Middle East — used to price more than two-thirds of the world's oil worth trillions of dollars – poses another major challenge.

"Many, many futures contracts are launched because they make some sense from a logical market point of view and they get a lot of attention. But then they die because the key is liquidity," said Jeff Brown, president at FGE, an international energy consultant.

There are really only a handful of truly global oil contracts from which all else is based, Brown explained, adding: "It will be extraordinarily difficult to change that."

Level playing field?
Another obstacle standing in the path of China's ambitions to price oil in yuan is the currency itself. The yuan is not yet fully convertible, it's fixed daily, prone to intervention and subject to capital controls.

Given that regime of tight control over the currency, many global players are likely to assume a yuan-denominated oil benchmark would be firmly under Beijing's thumb.

"My biggest reservations are the role of the Chinese central government, potential state intervention and favoritism toward Chinese companies," said John Driscoll, director of JTD Energy Services in Singapore and a former oil trader whose career spans nearly 40 years.

"Will the contract create a level playing field? The biggest challenge in global oil markets may be ensuring that no country or entity garners a dominant advantage," Driscoll added. "China may be world's fastest growing and most formidable energy consumer, but its central government plays a dominant role in the energy sector."

Beijing is likely to lean heavily on state-owned oil companies to adopt the yuan-based contract in an effort to drum up activity and generate sufficient liquidity — the lifeblood of any financial instrument. But despite the scale they bring, involving such state-backed players risks discouraging participants outside China.

Final stage
The main hope for the survival of a yuan-based oil futures contract, according to FGE's Brown, is that the government pushes the Chinese national oil companies onto the exchange.

Still, he added, "Most counterparties will not want anything to do with this contract as it adds in a layer of cost and risk. They also don't like contracts with only a few dominant buyers or sellers and a government role."

Beijing is plowing ahead regardless, and state-run media reported in September the plan was "moving swiftly."

Yuan pricing and clearing of crude oil futures is the "beginning" of a broader strategic push "to support yuan pricing and clearing in commodities futures trading," Pan Gongsheng, director of the State Administration of Foreign Exchange, said last month.

To support the new benchmark, China has opened more than 6,000 trading accounts for the crude futures contract, Reuters reported in July.

'Well-advanced'
The market's response to the yuan-priced oil benchmark is likely to be lukewarm at first, "but could grow over time, especially if it sparks other commodity hedging tools," said Rachel Ziemba, managing director of emerging markets at Roubini Global Economics.

China is likely to approach its main crude oil suppliers in the Middle East, Russia and Asia — some of who already accept the yuan as payment — to price their cargoes off a Chinese benchmark.

"The U.S. coverage is dropping off," said Juerg Kiener, managing director and chief investment officer of asset manager Swiss Asia Capital. "Iraq, Russia and Indonesia have all joined in non-dollar trades."

The petro-yuan is "well-advanced" and already "structurally in place," Kiener added: "As China is an importer it will push harder to get yuan contracts."

https://www.cnbc.com/2017/10/24/petro-yuan-china-wants-to-dethrone-dollar-rmb-denominated-oil-contracts.html

[carlisle1]

Oil is traded on world markets only for dollars.

It is true that before 2017 things were 100% that way for a long time.

In 2017 however china (being the largest importer of oil in the world) announced plans for oil transactions to be denominated in the yuan (china's native currency):

China has grand ambitions to dethrone the dollar. It may make a powerful move this year

China is looking to make a major move against the dollar's global dominance, and it may come as early as this year
The plan is to price oil in yuan using a gold-backed futures contract in Shanghai, but the road will be long and arduous

China is looking to make a major move against the dollar's global dominance, and it may come as early as this year.

The new strategy is to enlist the energy markets' help: Beijing may introduce a new way to price oil in coming months — but unlike the contracts based on the U.S. dollar that currently dominate global markets, this benchmark would use China's own currency. If there's widespread adoption, as the Chinese hope, then that will mark a step toward challenging the greenback's status as the world's most powerful currency.

China is the world's top oil importer, and so Beijing sees it as only logical that its own currency should price the global economy's most important commodity. But beyond that, moving away from the dollar is a strategic priority for countries like China and Russia. Both aim to ultimately reduce their dependency on the greenback, limiting their exposure to U.S. currency risk and the politics of American sanctions regimes.

The plan is to price oil in yuan using a gold-backed futures contract in Shanghai, but the road will be long and arduous.

"Game changer it is not — at least not yet," said Gal Luft, co-director of the Institute for the Analysis of Global Security, a Washington based think tank focused on energy security. "But it is another indicator of the beginning of the glacial, and I emphasize the word glacial, decline of the dollar."

Beijing faces skeptical global oil markets and global perceptions it exerts too much state control. Those factors will hinder its drive to build a viable oil pricing benchmark that's able to compete with more established benchmarks like West Texas Intermediate or Brent (both dollar-denominated).

The architects of the "petro-yuan" face an uphill struggle in dislodging the "petrodollar" and, with it, more than four decades of U.S. dollar-priced oil. Attracting interest from entrenched and active markets in Europe, the U.S. and the Middle East — used to price more than two-thirds of the world's oil worth trillions of dollars – poses another major challenge.

"Many, many futures contracts are launched because they make some sense from a logical market point of view and they get a lot of attention. But then they die because the key is liquidity," said Jeff Brown, president at FGE, an international energy consultant.

There are really only a handful of truly global oil contracts from which all else is based, Brown explained, adding: "It will be extraordinarily difficult to change that."

Level playing field?
Another obstacle standing in the path of China's ambitions to price oil in yuan is the currency itself. The yuan is not yet fully convertible, it's fixed daily, prone to intervention and subject to capital controls.

Given that regime of tight control over the currency, many global players are likely to assume a yuan-denominated oil benchmark would be firmly under Beijing's thumb.

"My biggest reservations are the role of the Chinese central government, potential state intervention and favoritism toward Chinese companies," said John Driscoll, director of JTD Energy Services in Singapore and a former oil trader whose career spans nearly 40 years.

"Will the contract create a level playing field? The biggest challenge in global oil markets may be ensuring that no country or entity garners a dominant advantage," Driscoll added. "China may be world's fastest growing and most formidable energy consumer, but its central government plays a dominant role in the energy sector."

Beijing is likely to lean heavily on state-owned oil companies to adopt the yuan-based contract in an effort to drum up activity and generate sufficient liquidity — the lifeblood of any financial instrument. But despite the scale they bring, involving such state-backed players risks discouraging participants outside China.

Final stage
The main hope for the survival of a yuan-based oil futures contract, according to FGE's Brown, is that the government pushes the Chinese national oil companies onto the exchange.

Still, he added, "Most counterparties will not want anything to do with this contract as it adds in a layer of cost and risk. They also don't like contracts with only a few dominant buyers or sellers and a government role."

Beijing is plowing ahead regardless, and state-run media reported in September the plan was "moving swiftly."

Yuan pricing and clearing of crude oil futures is the "beginning" of a broader strategic push "to support yuan pricing and clearing in commodities futures trading," Pan Gongsheng, director of the State Administration of Foreign Exchange, said last month.

To support the new benchmark, China has opened more than 6,000 trading accounts for the crude futures contract, Reuters reported in July.

'Well-advanced'
The market's response to the yuan-priced oil benchmark is likely to be lukewarm at first, "but could grow over time, especially if it sparks other commodity hedging tools," said Rachel Ziemba, managing director of emerging markets at Roubini Global Economics.

China is likely to approach its main crude oil suppliers in the Middle East, Russia and Asia — some of who already accept the yuan as payment — to price their cargoes off a Chinese benchmark.

"The U.S. coverage is dropping off," said Juerg Kiener, managing director and chief investment officer of asset manager Swiss Asia Capital. "Iraq, Russia and Indonesia have all joined in non-dollar trades."

The petro-yuan is "well-advanced" and already "structurally in place," Kiener added: "As China is an importer it will push harder to get yuan contracts."

https://www.cnbc.com/2017/10/24/petro-yuan-china-wants-to-dethrone-dollar-rmb-denominated-oil-contracts.html

But it was china,which one of the biggest country in the world,and as what news saying China is the strongest country now,so i think they have the rights to make their transactions via yuan..but not venezuela which in crisis right now and just trying to bully US .but not capable of anything for sure

[Betwrong]

I'm sure this petro will collapse for the same reasons as Venezuelan bolívar has collapsed. This dictatorship government is full of lies, they don't care about their people only robbing them more and more. "Backed by oil", really? What does it even mean apart from attempting to fool potential investors? Petro is backed by nothing except the words of Nicolas Maduro who is a known liar and would lose the elections in April if only they were fair ones and right then this coin would become absolutely worthless. But even if Maduro will not lose the elections I think the price of this coin will be around 1 Satoshi as of any other sh*tcoins with time.

[peterthegreat]

I'm sure this petro will collapse for the same reasons as Venezuelan bolívar has collapsed. This dictatorship government is full of lies, they don't care about their people only robbing them more and more. "Backed by oil", really? What does it even mean apart from attempting to fool potential investors? Petro is backed by nothing except the words of Nicolas Maduro who is a known liar and would lose the elections in April if only they were fair ones and right then this coin would become absolutely worthless. But even if Maduro will not lose the elections I think the price of this coin will be around 1 Satoshi as of any other sh*tcoins with time.

It would be backed by oil if they are willing to exchange petro for real oil but like you said I don't think this will be true.

This coin is not backed by anything until someone exchanges petro for real oil.

[Tyrantt]

It won't help them anything. They need to let back foreign investors and get rid of the socialist regime if they want to get back on track in the next couple of years. State crypto won't do anything at this point with the socialism still going on.

[numizmat]

It would be backed by oil if they are willing to exchange petro for real oil but like you said I don't think this will be true.

This coin is not backed by anything until someone exchanges petro for real oil.

The US are concerned that the sale of Petro is being carried out in order to raise funds that will circumvent financial sanctions that have been imposed on the controversial state. Others have labelled the ICO a pre-sale of oil, which will cause issues in the near future. This is primarily because some of the oil that is being used as backing for the ICO is yet to be mined, and does not belong entirely to the Venezuelan government in the first place. Controversial Venezuelan Pre-Sale For Petro Goes Ahead - “The Petro is born and we are going to have a total success for the welfare of Venezuela” – Nicolas Maduro

[alyssa85]

Apparently Venezuela has already raised $735 million from it's pre-sale:

https://www.rt.com/business/419397-venezuela-petro-cryptocurrency-maduro/

Investors have purchased some $735 million worth of Venezuela’s oil-backed cryptocurrency on the very first day of pre-sale, according to President Nicolas Maduro, who praised it as means of breaching the US financial blockade.

“Today, a cryptocurrency is being born that can take on Superman,” Maduro announced on Tuesday, referring to the US as a comic character. The Venezuelan leader, however, provided no details about the first investors in the ‘petro’, which is backed by the country’s oil, gas, gold and diamond reserves.

“The Bolivarian Republic of Venezuela guarantees that it will receive PETRO as a form of payment for national taxes, fees, contributions and public services, taking as a reference the previous day's Venezuelan oil basket price with a discount,” says the official website for the newly-launched asset, which is set to go public next month.

[Emin90]

According to the President of the country that have collected but so far no official confirmation but only his posts on twitter. So be a little wait.And yet it has been said that oil companies in the country are obliged to conclude transactions part using these coins even though Parliament had voted against the!

[poptok1]

Apparently Venezuela has already raised $735 million from it's pre-sale:

  a drowning man will clutch at a straw
Note that this info is realised only by the official website which I don't even bother to visit, cause who knows what sort of scripts are running there... Anyway, probably pile of bollocks spaded in order to encourage more money to be thrown in to the firepit.
If true... than jeez, I have no word for stupidity driven greed, or the other way around.
I feel sorry for all those poor people starving there but this scam wont help them. Even if somehow successful, it will be the next communists fraud.

How do those investors expect this "backing" even work? They wont send you barrels of oil with DHL, that's obvious. And when one goes there to use this coin than... he will be quickly "evaporated" because this is how commies work. Madness, it should be considered as backing up homicidal organisations.

[Betwrong]

Apparently Venezuela has already raised $735 million from it's pre-sale:

  a drowning man will clutch at a straw
Note that this info is realised only by the official website which I don't even bother to visit, cause who knows what sort of scripts are running there... Anyway, probably pile of bollocks spaded in order to encourage more money to be thrown in to the firepit.
If true... than jeez, I have no word for stupidity driven greed, or the other way around.
I feel sorry for all those poor people starving there but this scam wont help them. Even if somehow successful, it will be the next communists fraud.

How do those investors expect this "backing" even work? They wont send you barrels of oil with DHL, that's obvious. And when one goes there to use this coin than... he will be quickly "evaporated" because this is how commies work. Madness, it should be considered as backing up homicidal organisations.

I agree with you, as I said earlier I don't trust this guy, their president, at all. At fist seeing that $735 million number from petro's pre-sale I though it's just another lie since the primary source of this information is the Venezuelan government. But then after some research I came to conclusion that it might be true. The thing is that Venezuelan Bolívar continues its falling and the International Monetary Fund forecasts an inflation rate of 13,000 per cent for 2018. Taking into account that they promised to accept the petro as payment for taxes, fees and public services in the petro's whitepaper, poor Venezuelan citizens might start buying the coin because indeed holding it might be a bit better than holding the Bolivar. I didn't mean to say that this petro is good for investment, but compared to Venezuelan Bolívar probably it is.

[poptok1]

...but compared to Venezuelan Bolívar probably it is.

Totally in agreement with you on that. As a matter of fact even seashells would perform better than Bolivar, heck I saw some nice souvenir shells for 2.6$ yesterday in my local shop... jokes aside;
I don't know what is your background or who buys this petro but for me, every communist organisation is an organised crime group with murderous tendency, genocide inclinations and should be considered as an enemy of piece with potential plans for crime against humanity!
This strikes me personally, because I know how it feels to live under communist regime. This dangerous ideology eats through people like lupus, its like a cancer of the mind! It leaves human-beings empty, deprived, derailed, sick to the bone and miserable. Someone who never experienced that system on their own skin, will never understand how painful and sad it can be. It sticks to the brain like a warm, used chewing gum and stays for the generation, infecting all what's around, with one goal - destruction of thyself.

With all respect for the poor people of BoliviaVenezuela, their system need no rescue, it needs executioner.    
Now, from my perspective ANYONE who bought this coin should be considered as supporter of the oppression system, should be ashamed publicly and forced to personally apologize families of those who died under that horrible, inhuman system. There was a time in America when such people would face prison time... I sometimes regret that it is over.

[Maestro75]

Apparently Venezuela has already raised $735 million from it's pre-sale:

https://www.rt.com/business/419397-venezuela-petro-cryptocurrency-maduro/

Investors have purchased some $735 million worth of Venezuela’s oil-backed cryptocurrency on the very first day of pre-sale, according to President Nicolas Maduro, who praised it as means of breaching the US financial blockade.

“Today, a cryptocurrency is being born that can take on Superman,” Maduro announced on Tuesday, referring to the US as a comic character. The Venezuelan leader, however, provided no details about the first investors in the ‘petro’, which is backed by the country’s oil, gas, gold and diamond reserves.

“The Bolivarian Republic of Venezuela guarantees that it will receive PETRO as a form of payment for national taxes, fees, contributions and public services, taking as a reference the previous day's Venezuelan oil basket price with a discount,” says the official website for the newly-launched asset, which is set to go public next month.

It is a good sign that Venezuela has been able to accomplish that huge amount on presale. If eventually the Petro-crypto gets the country out of the woods, believe me the wide world will not have a better approach than to embrace cryptocurrency. Fans of virtual currency should just hope this succeeds. All the same, thumb up for Venezuela.

[pereira4]

Still don't see how one is supposed to believe their cryptocurrency (the so called PETRO token) is going to properly and accurately represent their supplies of oil, gas, gold and diamond at any rate. Why would you believe that? Is the process open source? where can I check if the PETRO token is presented by current natural resources in possession of the Venezuelan' government?

Give me a break. I wouldn't believe any of this unless it's all open source, and I doubt a government like Maduro's would make it all accessible for everyone to see.

[buytheeffinD]

Apparently Venezuela has already raised $735 million from it's pre-sale:

https://www.rt.com/business/419397-venezuela-petro-cryptocurrency-maduro/

Investors have purchased some $735 million worth of Venezuela’s oil-backed cryptocurrency on the very first day of pre-sale, according to President Nicolas Maduro, who praised it as means of breaching the US financial blockade.

“Today, a cryptocurrency is being born that can take on Superman,” Maduro announced on Tuesday, referring to the US as a comic character. The Venezuelan leader, however, provided no details about the first investors in the ‘petro’, which is backed by the country’s oil, gas, gold and diamond reserves.

“The Bolivarian Republic of Venezuela guarantees that it will receive PETRO as a form of payment for national taxes, fees, contributions and public services, taking as a reference the previous day's Venezuelan oil basket price with a discount,” says the official website for the newly-launched asset, which is set to go public next month.

It is a good sign that Venezuela has been able to accomplish that huge amount on presale. If eventually the Petro-crypto gets the country out of the woods, believe me the wide world will not have a better approach than to embrace cryptocurrency. Fans of virtual currency should just hope this succeeds. All the same, thumb up for Venezuela.

I would disagree because I don't think we want this coin to succeed. If it does all it will show is that another centralized party came in with authority and ran a centralized coin that would not bode well for crypto. So therefore I would argue we need a project like this to fail, we don't want to see more "Ripples" around here do we?

[oaktree]

Apparently Venezuela has already raised $735 million from it's pre-sale:

Well, if people are prepared to invest in scam ICO's, why not invest in an ICO of a scam government?

[bitbunnny]

The fact, if it's true at all, that this coin is backed by oil, gass and diamonds doesn't realy mean anything. And how could anyone even check all this?
Don't get me wrong but anything that comes from "exotic" government in Venezuela I would take with big doubts and reserve. To my opinion this is only propaganda and has nothing to do with reality.

[aardvark15]

Not sure how this is any better than any fiat government currency. It’s a government run currency that is electronic. I still think any decentralized cryptocurrency would be better than a government currency especially if the government is bankrupt.

Will they be able to create as many coins as they want and at any time they want? If so, it will be deflationary.