A Venezuela oil cryptocurrency has been launched. This is not an unexpected event because it was believed that sometime some oil producing country would generate a cryptocurrency. This is a means by which oil-producing countries can bypass strict US government economic sanctions. Known as the ‘Petro’, this cryptocurrency has been created in an attempt to help the country’s economy.
US Sanctions Against Venezuela the Likely Cause
Venezuela has been suffering for many years, and the tough economic sanctions applied by the US government have hit it badly. Venezuela’s weak economy was particularly badly affected. It has been fluctuating between hyperinflation and severe deflation for many years now.
That said, the new oil-related cryptocurrency might introduce a certain level of stability to the situation. This is the first cryptocurrency that has been generated by a sovereign state.
Venezuela Oil Cryptocurrency
Some claim that this is a very fortuitous time for the Venezuela oil cryptocurrency to be generated! It coincides with the period in the country’s history when it owes $150 billion of foreign debt that it cannot afford to repay! It has been claimed by the Venezuelan government opposition that it was an illegal act. The US Treasury Dept. has stated that it could violate sanctions that were imposed in 2017.
Apparently, 100 million Petros will be put on the market at an initial value of $60. This is the mid-January price of a barrel of Venezuelan crude. No information was provided on exchanges. Oil, and oil-based products, make up 96% of the country’s exports.
The Petro Venezuela Oil Cryptocurrency the Start of a Trend?
We shall wait in anticipation to find out if a cryptocurrency can be a means of overcoming government restrictions. The Petro Venezuela oil cryptocurrency may not be the last cryptocurrency to be generated by a country. Particularly now when cryptocurrencies appear to be springing up everywhere!
First the Bitcoin blockchain then the Ethereum and now the Venezuelan oil cryptocurrency. There are perhaps too many of the now for them to have much impact. Perhaps one day that will be the only currency there is! For now, we shall sit and watch and wait!