Maduro Unveils "The Petro": Venezuela's Official Cryptocurrency To "Overcome Financial Blockade"

Three months ago, in a not entirely surprising move meant to circumvent US economic sanctions on Venezuela, president Nicolas Maduro announced that his nation would stop accepting dollars as payment for oil imports, followed just days later by the announcement that in a dramatic shift away from the Petrodollar and toward Beijing, Venezuela would begin publishing its oil basket price in Chinese yuan. The strategic shift away from the USD did not work quite as expect, because a little over two months later, both Venezuela and its state-owned energy company, PDVSA were declared in default on their debt obligations by ISDA, which triggered the respective CDS contracts as the country's long-expected insolvency became fact.

Fast forward to today when seemingly impressed by the global crypto craze, Maduro on Sunday announced the creation of the "Petro", Venezuela's official cryptocurrency "to advance in the matter of monetary sovereignty, to make financial transactions and to overcome the financial blockade".

"Venezuela announces the creation of its cryptocurrency, the Petro; this will allow us to move towards new forms of international financing for the economic and social development of the country," Maduro said during his weekly television program, broadcast on the state channel VTV.

"The objective is to advance in the Venezuelan economy and overcome the financial blockade, this allows us to continue in the economic and social development supported by Venezuelan riches," said the president, explaining that his government will make a cryptocurrency issue "backed by reserves of Venezuelan gold, oil, gas and diamond wealth."

Nicolas Maduro dances with supporters in Caracas, Venezuela, December 1, 2017

It was not exactly clear how this PetroCoin would be backed by various natural resources when the whole point of cryptos is that they are not backed by anything, and as such it appears that what Maduro is trying to do is admit that the hyperinflating Bolivar has failed as a sovereign reserve, and the country is hoping to confuse its global trading partners enough into believing that it somehow had a new "bitcoin" on its hands, which like the real thing would then proceed to appreciate in value in the near future.

While that is very much doubtful, as of this moment there is little additional information on this radical monetary overhaul, which is why we were amused by the following rhetorical question: instead of a cryptocurrency, perhaps Maduro meant to unveil the world's first kleptocurrency instead?

Joking aside, perhaps Maduro is on to something: as CoinTelegraph reported some time ago, "Venezuelans have found a better alternative to escape hyperinflation. They’ve taken Bitcoin as an alternative, and  mining Bitcoin has become big in the country." The reason: unlike most places in the world, electricity here is virtually free, allowing miners to create blocks without almost any recurring costs:

With few utilities that its citizens can still afford, electricity happens to be among them. In fact, electricity power in the country is hugely subsidized and virtually free. This is all thanks to President Nicolas Maduro of the socialist regime.


Such a setup created an opportunity for struggling citizens, as Bitcoin miners can run many transactions and earn at least $500 a month. This can feed a family and provide them their basic needs – goods, medications, and such.

That said, Venezuela's miners quickly become the government’s “capitalist parasites”, since Bitcoin is still not legally regulated in the country, leading to some miners getting arrested for stealing free electricity. In other words, what Maduro is trying to do is impose the first de facto sovereign crypto, one which however has no other parallels to any of the dozens of other accepted cryptocurrencies.

One also wonders how long until the Venezuela government launches the first ever bailout ICO to save, well, itself.

One thing is clear, however: the fate of the "Petro" will be closely watched by the rest of the world in the coming weeks.


BTFDemocracy Automatic Choke Mon, 12/04/2017 - 16:47 Permalink

Can't wait for the pump on Bitfinex to new ATH's on PetroCoin pump. Rumor is Jan 1st is pump time for Petro.Right now every single crypto coin is pumping hard, doubling in prices in days or hours, now they probably gonna pump (n' dump) Venezuela's new Petro coin. Especially if it appears on Bitfinex and there's newly minted USDTethers that day.

In reply to by Automatic Choke

MonetaryApostate Bunga Bunga Mon, 12/04/2017 - 00:28 Permalink

Nailed it, the corrupt wealthy have only exposed their scams further, eventually all of their lies will surface for the world to see.If you can't see cryptos as a scasm by the wealthy globally, then you are clearly ignorant!Look, a farmer one day decided to start an apple farm, soon other people wanted to work on his apple farm, & he paid them with apples, then the farm grew & the workers felt like they were getting cheated by working for something that grew off of trees, so the farmer, having a warehouse full of apples decided to fire all of his workers & hire new ones, of course the new workers were over joyed at having an opportunity to work, but after a while they began to see the futility of working for apples that they took from trees.Stop & think about the story, replacing apples with money, but the farmer who controlled the farm got all of their labor at what real cost to him?Now read this collection & you'll get it! need to open in a new tab)

In reply to by Bunga Bunga

cro_maat hedgeless_horseman Sun, 12/03/2017 - 15:26 Permalink

HH - The first part of Tyler's sentence " this Petrocoin would be backed" remains to be seen. The second half " when the whole point of cryptos is that they are not backed by anything," is pure fiction and surprising that it comes from an alt trading website.The main feature and appeal of cryptos is the distributed ledger which bypasses CBs and the ponzi scheme financial system that dominates today's markets. The Tylers should know this (most likely do know it) and lose creditbility pushing such a BS meme.Unless I missed the sarcasm tag :)

In reply to by hedgeless_horseman

BallAndChained Pure Evil Sun, 12/03/2017 - 19:46 Permalink

> Unlike gold, has anyone figured out if you can eat the block chain?You can put the Blockchain of NOTHINGNESS on a plastic USB stick and eat it.But it will taste the same as any other plastic USB stick, so you are not getting value for the money, and you can be scammed by somebody putting ordinary NOTHINGNESS on the plastic stick instead of luxurious chained NOTHINGNESS.To truly experience the luxury of eating a Blockchain of NOTHINGNESS, you will need to hire an independent auditor to make sure the plastic USB stick really contains a Blockchain of NOTHINGNESS instead of ordinary NOTHINGNESS. So you can show your friends the certificate to prove that you have eaten certified NOTHINGNESS. 

In reply to by Pure Evil

Mister Ponzi cro_maat Sun, 12/03/2017 - 16:51 Permalink

The whole point of cryptos is that they are not backed by anything.I've written that before. As you pointed out the main feature of cryptos is the distributed ledger. Now, we know that a decentralized database is worse than a centralized one in almost all respects (especially, processing time and costs) except for one: Due to the decentralized character there is no central counterparty to trust enabling trustless transactions. If you take out this one feature there really is no point in having a decentralized database.If you back cryptos by something you are doing exactly that: reintroducing counterparty risk into the equation. Being backed by something means it can be exchanged for the thing it is backed by. This "collateral" cannot be decentralized meaning the need for trust is reintrodoced. Is the collateral there? Is enough collateral there? Is part of it fake?A crypto backed by something is a contradiction in terms IMHO.

In reply to by cro_maat

BallAndChained Mister Ponzi Sun, 12/03/2017 - 19:22 Permalink

> Due to the decentralized character there is no central counterparty to trustAren't you trusting the centralized Chinese miners and centralized few developers?If the centralized Chinese miners jump ship to another crypto of their choice, Bitcon plunges.Anybody holding Bitcon is putting a huge amount of trust on the centralized Chinese miners and putting huge trust on the centralized few developers to not screw it up. 

In reply to by Mister Ponzi

serotonindumptruck hedgeless_horseman Sun, 12/03/2017 - 15:48 Permalink

Sorta like back in the day (25-30 years ago) when telecommunication companies were competing for market share.The sales rep would ask the customers if they wanted AT&T or MCI.If the customer said something like:"It doesn't matter"or"I don't care"Well then, there was an extremely expensive telecom named "It doesn't matter" or "I don't care" who would gladly service your long-distance calling plan.

In reply to by hedgeless_horseman

Son of Captain Nemo MEFOBILLS Sun, 12/03/2017 - 18:57 Permalink

"They have shit-loads of oil, why do they need Au? Russia gave them a money loan, that is to be paid back in oil, even though Russia doesn't need the oil."


Thanks for finishing it!

Looks like Yankee Jewdle up North is going to need some "assertive drills" like this in order to get Venezuela to be more cooperative (…)... When all you have left is the "hammer" and everything else is a "nail"!!!

Ah... but for those of U.S. old enough to remember the humble beginnings of our steady decline 40 years ago when we still had $$$ that was worth something and oil reserves other than "shale" that could be tapped CONUS... And... well of course... We still had phyz on demand with far fewer paper contracts chasing it! And weren't hemorhaging as many friends back then because our money was still good enough to "talk"!!!

In reply to by MEFOBILLS