Venezuela looks to get around economic sanctions with Petro cryptocurrency

Venezuela’s government has announced the pre-sale phase of its Petro cryptocurrency, the value of which it will underpin with the country’s natural resources – such as oil, gas, diamonds and gold – in the hope of raising $6 billion dollars.

The move comes with the country under economic sanction from US and EU authorities. The US, in particular, has tapped into a more strident vein of rhetoric under President Donald Trump in the hope of undermining the country’s current leader, Nicolas Maduro, who took over from the charismatic, populist leader Hugo Chavez, who died in 2013.

As you would perhaps expect, the US has already warned that any of its citizens interested in investing in the pre-sale, which begins February 20th, could be putting themselves at “legal risk” as they would consider it to be equivalent to extending credit to the country.

While many new companies have found cryptocurrency and ICOs a rich new vein of investment from around the globe, Venezuela’s aspirations for Petro are notch up from what’s gone before. Indeed, the bold move could become something of a template for other politically and economically isolated regimes across the globe.

The first tranche of takers for Petro will be able to use their existing crypto investments to buy the coin – as well as other currencies from around the globe. They will not, however, be able to use Venezuela’s own, the bolívar fuerte, which replaced the original Bolívar in 2008 after a devaluation. The new currency has suffered under a series of subsequent inflation-driven devaluations since, however, with the last being on February 5th this year.