Venezuela’s President Nicolas Maduro said the country is pushing ahead with plans for the first sale of its cryptocurrency next month, and developing plans for its use with a national ID card held by at least 15 million Venezuelans.
The first sale of the petro will take place Feb. 20 and a number of "mining farms" are being developed at schools and universities, Maduro said, after signing the petro’s whitepaper. That represents a change from the initial draft of the currency, which had said it would be a pre-mined coin.
Venezuela is suffering a dire shortage of bank notes after the central bank failed to issue enough cash to keep pace with surging inflation. ATMS are empty across the capital, Caracas, and local banks limit customers to withdraw the equivalent of just a few cents a day. The International Monetary Fund predicts inflation will spiral to 13,000 per cent by the end of this year, while the economy is set to contract 15 per cent.
“This is the moment to accelerate the entry of the petro, to have faith in what we’ve created and in the technological and intellectual capacity of our country," Maduro said on state TV. "The petro will have a great impact, in how we access foreign currencies for the country and in how we obtain goods and services that we need from around the world.”
Venezuela’s embattled opposition is more skeptical.
“At the end of the day, it’s a coin being issued by the government,” said Jose Guerra, an opposition lawmaker and a member of the National Assembly’s Finance Commission. “It’s not going to be the means to find financing or avoid sanctions.”
Previous drafts of the white paper showed each coin would be backed by one barrel of Venezuelan crude, though the coins can’t be exchanged for the actual oil. The petro will be divisible into 100 million units and the minimum exchange unit will be called the mene, according to the draft proposal.
Venezuela is studying plans to incorporate the petro into the "card of the fatherland," a state ID card used to claim government subsidies and regulated foods, Maduro said.
While the president said more details would be available on www.elpetro.gob.ve, the page isn’t yet functional.
Last week, Venezuela’s Constituent Assembly abruptly announced presidential elections by the end of April. Maduro immediately offered himself as the official candidate.
© 2018 Bloomberg L.P