Venezuela Will Back Its Cryptocurrency With 5 Billion Barrels Of Oil, Gold Deposits

Four 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.

Then, in early December, clearly fascinated and captivated by the global crypto craze, Maduro shocked the world by announcing 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".


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

"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."

Still, as we said when he first commented  on Venezuela's bizarre foray into digital currencies, "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.

Today we got the answer when Venezuela's president announced that "every single Petro will be backed by a barrel of oil... and gold."

"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."

Some joked at the time that a different name might be more suitable...

But now, as RT reports, Maduro confirmed the backing of the national cryptocurrency Petro with the country’s vast natural resource reserves.

“Here’s the document formalizing the provision of the certified Ayacucho oil field No.1 in the Orinoco Petroleum Belt for the support of El Petro cryptocurrency,” Maduro said on national TV.

Maduro said the field’s “reserves amount to five billion barrels of oil,” which is confirmed by the corresponding “international certificate.”

“Every single Petro will be backed by a barrel of oil,” Maduro said, promising to provide cryptocurrency mining throughout the country.

 

“We will set up a special team of cryptocurrency specialists so they will be engaged in mining in all states and municipalities of our country.”

The Venezuelan leader has also promised to allocate Arco Minero gold deposits from the Orinoco Belt along with the country’s diamond deposits.

The Venezuelan president explained the purpose was “to advance the country's monetary sovereignty, to carry out financial transactions and to defeat the financial blockade against the country.”

“We are facing a financial war against the country which we have denounced, and the opposition has denied. There are business people who are unaffected by Donald Trump's blockade. With this, we will join the 21st century,” said Maduro.

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Finally, as Pepe Escobar concluded recently, it ain’t over till the fat (golden) lady sings. When the beginning of the end of the petrodollar system – established by Kissinger in tandem with the House of Saud way back in 1974 – becomes a fact on the ground, all eyes will be focused on the NSS counterpunch.

Comments

HRClinton BaBaBouy Dec 28, 2017 11:40 AM Permalink

Maduro must have been reading my comments, because I've been telling you for weeks that...

I trade my HODLed Bitcoins only for other decentralized assets:  Gold, IGD (Investment Grade Diamonds), and RE.

I also told you to join me on "Going Galt", by withdrawing our assets and labor from the economy of the Debt Plantation, and to join the Parallel Economy of free people:

PARALLEL Economy =

   = Barter + PM + Crypto-Currencies + RE 

   = fiat killer

   = money of self-Liberated People, free from the Debt Plantation and its usurious, Global-lust (((Owners))).

Got brains & clarity? Got principles & courage? Use them! Be brave, be proud and shout out loud: "Fork you, Banksters!"

In reply to by BaBaBouy

Mementoil Dec 28, 2017 11:06 AM Permalink

What does it even mean, to back a crypto-currency with oil?
Can you go to the gas station, and fill up up your tank with "Petros"?
Or are you supposed to go to the oil field and pump it from the ground yourself?

OverTheHedge 1.21 jigawatts Dec 28, 2017 11:50 AM Permalink

I have the same problem, but I am already (and still) logged in on a tablet, and unable to log in via a computer (perhaps this is the issue? New, secure site only allows one instance at a time?).

All hail to Tyler, who might resolve this (I reported it more to let the admins know there was an issue than in expectation of getting it fixed instant). I imagine that there are a few choice words being exchanged at the moment.
If you can read this post, it means that I really was still logged in, so the problem lies in trying to log in again, without first logging out on the other device. Maybe. Perhaps.
RTFM, as I used to tell people back in the day, when I ran a help-desk.

In reply to by 1.21 jigawatts

Endgame Napoleon UTICA CLUB XX PURE Dec 28, 2017 11:28 AM Permalink

Other than the lack of an edit option, colored text and the ability to add a photo via a camera icon, I love the new rich text editor. Maybe, you can add a photo or <font color=green><strong>colored text</strong></font> with html, probably not. The only problem I have is hitting the B without the iPhone’s “copy / select” button popping up, after which it takes me back to the options page, where you can hit “home,” etc. It is like a spacial problem on this crowded screen. I have the smallest iPhone screen, the cheapest iPhone. 

In reply to by UTICA CLUB XX PURE

BritBob Dec 28, 2017 11:15 AM Permalink

Meanwhile in the South Atlantic

Falklands Oil

By a ruling of the UN, Argentina will extend its maritime platform (Politica Argentina) ; New map of the maritime platform reaffirms the sovereignty of Malvinas with UN endorsement (ElCronista); Argentina enlarges its territory 35%, with a UN endorsement ...(La Capital).To add to this euphoric atmosphere the Argentine Foreign Minister stated, ''This is a historic opportunity for Argentina. We have taken a great step in the demarcation of the outer limit of our continental shelf; the most extensive boundary of Argentina and our border with humanity,'' Foreign Minister Susana Malcorra told La Nacion, which tomorrow will publicly announce the details of this resolution. (Susana Malcorra, quoted by Dinatale M, La Nacion, Argentina, 27 March 2016).

 

But what did they say...And what does international law say about ownership of natural resources?

Argentina's Continental Shelf Claims and The UN CLCA Commission (1 page):-

https://www.academia.edu/33898951/Argentinas_Continental_Shelf_Claims_-The_UN_CLCS_Commission

 

0valueleft Dec 28, 2017 11:23 AM Permalink

This must be conflicting news for all the goldbugs and lambotards, there can only be one!, when people's minds are closed glued shut with loyalty.

Endgame Napoleon Snaffew Dec 28, 2017 11:34 AM Permalink

If I had an upvote arrow, I might click on it, assuming they don’t need 1,000 of their government-controlled crypto coins to buy a tube of toothpaste. I guess the oil-backed crypto is supposed to curb that problem. I don’t think Latin dancing will solve the problem, nor will hungry Venezuelans be distracted by that publicity stunt for long. They could put nude dancers up there; it still wouldn’t work. 

In reply to by Snaffew

Snaffew Endgame Napoleon Dec 28, 2017 11:46 AM Permalink

this is the infinacy of the crypto "revolution".  It will take some time to sort the wheat from the chaff, but I'm guessing that all the cryptos backed by nothing will be worthless, and cryptos backed by real assets will be the ones to own.  There is no other way to value them---people buying any of the 1300 cryptos out there backed by nothing will soon enough learn that they participated in the biggest bubble of all time---at least tulip bulbs gave you flowers.

In reply to by Endgame Napoleon

OverTheHedge Endgame Napoleon Dec 28, 2017 12:03 PM Permalink

The purists will hate this, because the whole point of a cryptocurrency is that there is no counterparty. However, if you can actually pledge a barrel of oil per coin, you're good to go in the real world, and theoretically oil traders might start preferring it to real oil (God knows people seem to prefer paper gold to the real thing, and paper gold is a hyperinflated joke).

The fun starts when the government inevitably starts to issue more coins than it has barrels of oil. If there is a bulletproof way of stopping that, then you have yourself some real money, for the first time in generations.

In reply to by Endgame Napoleon

chemcounter Dec 28, 2017 11:35 AM Permalink

So it is backed by slave labor to extract the resources in the form of a socialized workforce? If you want your gold, oil and diamonds, you will have to pay them to get it for you.

Snaffew Dec 28, 2017 11:35 AM Permalink

errrr.venezuela is ranked number 1 in the world for oil reserves---a crypto backed by their oil and gold is backed by something substantial, despite what the western press has brainwashed into people's minds about venezuela's assets.

Snaffew Dec 28, 2017 11:36 AM Permalink

errrr....venezuela is ranked number 1 in the world for oil reserves---a crypto backed by their oil and gold is backed by something substantial, despite what the western press has brainwashed into people's minds about venezuela's assets.

Snaffew shovelhead Dec 28, 2017 1:46 PM Permalink

venezuela's currency crisis is the result of the US led sanctions that ender the country's credit worthless.  Nobody can profitably trade with them, so their assets are as good as worthless...right now.  That will eventually change---in Venezuela's favor.  If you have valuable resources, they will be bought on the open market, right now, they are in limbo.

In reply to by shovelhead

makinbacon Dec 28, 2017 11:43 AM Permalink

If Muammar Gaddifi could of held out another 10 years.....

This will test the metal of Satan's little helpers in all the ABC offices of the US.

Nothing like a anonymous transfer of wealth on a high yield investment to bring even a US Congressmen to the table.

Will the MIC invade a country over Crytocurrency?

Let's dig up Manual Noriega and ask him.

null Arnold Babar Dec 28, 2017 1:06 PM Permalink

A wet dream.

But yea, go for it ... you just gonna get MORE dollars on the street because you will see that the population only trusts these crappy currencies because they are somewhat dollar based.

 

It’d be good for the USA ... do it ... bring the USD down. Try it. Then try to sell something in the market that is about the same size as the rest together.

In reply to by Arnold Babar