Venezuela Tries To Pay Russian Debt With Cryptocurrency

Authored by Tsvetana Paraskova via OilPrice.com,

If crisis-hit Venezuela was hoping to pay off its US$3.15-billion debt to Russia with its new cryptocurrency, those hopes have been shattered as the Russian Finance Ministry announces that it won’t be accepting digital coin.

Venezuela will not be paying any part of its debt to Russia with its cryptocurrency, the head of the Russian Finance Ministry’s state debt department, Konstantin Vyshkovsky, has said.

In November last year, Russia threw a life-line to Venezuela after the two countries signed a deal to restructure US$3.15 billion worth of Venezuelan debt owed to Moscow. Under the terms of the deal, Venezuela will be repaying the debt over the next ten years, of which the first six years include “minimal payments”.

The following month, Venezuelan President Nicolas Maduro announced that his country would be issuing an oil-backed cryptocurrency, which it did, in February this year.

Maduro’s propaganda machine is touting the digital coin as a ‘ground-breaking’ first-ever national crypto currency, the El Petro--backed by 5 billion barrels of oil reserves in Venezuela’s Orinoco Belt.

But most observers see this crypto issuance as a desperate attempt to skirt U.S. financial sanctions.

Earlier this month, U.S. President Donald Trump banned U.S. purchases, transactions, and dealings of any digital coin or token issued for or by the government of Venezuela.

Last week, Time magazine reported that Russia secretly helped Venezuela in creating the Petro, with the purpose of undermining the power of U.S. sanctions, the magazine reported, citing sources familiar with the effort.

Russia slammed the Time report as “fake news”, with Deputy Director of the Information and Press Department of the Russian Foreign Ministry, Artyom Kozhin, saying that Russia and Venezuela had never worked together on the development of the Venezuelan cryptocurrency.

Russia and China are the last holdouts that still finance Venezuela, which is digging deeper into the downward spiral of economic crisis, hyperinflation, and crumbling oil production. However, China is reportedly thinking of cutting off Venezuela from new loans. This would leave Russia as the only financial supporter of the Maduro regime, and if all it’s got is a crypto coin that no one really believes in to pay off debt, loans are likely to be plentiful.

Comments

Jack Oliver Thu, 03/29/2018 - 02:51 Permalink

I am sure Russia will accept GOLD backed ‘Petro Yuan’ though - if not China will !! 

No other way out for Venezuela ! 

Russia will have to accept their OIL ! 

Adolph.H. RAT005 Thu, 03/29/2018 - 03:21 Permalink

Maduro wanting to have it both ways. Funny. 

There's a well known saying that goes something like: "one lends his money only to the rich".

There you have it, without credibility you can't just throw a magical virtual printing machine out of thin air and declare it will solve all your problems. 

On the other hand Russia is going to be pretty happy securing Venezuela's oil as a collateral. I'm sure the deep state USA will appreciate...

In reply to by RAT005

DownWithYogaPants Shemp 4 Victory Thu, 03/29/2018 - 07:25 Permalink

It's cold in Russia. Can you use wheelbarrows full of USB drives as kindling?  

A cryptocurrency issued by a government is quite analogous to a concrete life preserver ring.  It may have the right shape but it does not have the right function.

You know when people write L.O.L. - laugh out loud?  I literally laughed out loud when I saw the title. LLOL.  Vlad did worse than accept a government backed CC  He extended credit to a Latin American.  One thing I learned from Brazil is that you will get in very good shape chasing behind a Brazilian who owes you money.

With all my Petros I bought a ROFLicoptor.  Imagine how much I save on gas?  It is flex fuel.  It runs on chuckles or laughing gas.

In reply to by Shemp 4 Victory

nmewn 52821740 Thu, 03/29/2018 - 06:56 Permalink

See, here's the thing.

I owe the Russians like, 3.5 billion dollars, I'm a dead ass broke socialist retard (but I repeat myself), my peeps are starving & dying and all the production capacity in my nation is going into it's final death rattle. 

So how am I going to get the Russians off my back about that 3.5 bil?

I know! I'll invent a currency from nothing! I'll call it the El Petro and give it to them!

Nyet!...lol.

In reply to by 52821740

zebra77a nmewn Thu, 03/29/2018 - 09:45 Permalink

Half of Venezuela is starving..

Growing Power grew 1,000,000 lbs of food off 3 acres - in one year, its about 915 lbs of food A DAY off each acre.

Currently Venezuela has 916445 sq km of which astoundingly only 3.06% is considered arable.

Which gives them 69.29 Million acres of arable land, and if they applied the techniques of Growing Power they would have..

2003 lbs of food Per Person PER DAY.

 

If they built greenhouses across 12.7 million acres of their current  arable land they could grow 5 lbs of food per day for 7,000,000,000 people (the whole planet).

 

The problem is it may require up to 160 manhours to process and grow 2003 lbs of food by hand (rough estimates.) Approximately 12 lbs per hour worked.  This is from a 1958 study from Cornell into growing broccoli. Today it would be expected to be much higher... It would require their population increasing 1600% to about 530 million to manually feed the whole planet from greenhouses. Bring in enough robots grant you and different techniques if we can harvest 300lbs of food for each manhour worked we are then talking about them being able to feed the entire planet with only 21 million laborers or robot managers or whatever you want to call them. And that is with 100 days off a year.

If they ALL worked 8 hours a day totally manually they could produce only about 95 lbs of food a day per person for themselves.

So if 1 member of a family worked 1 day a week (8 hours) they could produce approximately 100 lbs of food  giving a family of five  100 over 35 or about 3 lbs of food a day..

It takes a very coordinated and concerted effort for a population to starve itself. It *really* takes a lot of work.  First you need to make sure that nobody knows how to take care of themselves, to be highly conditioned to only eat what is given to them, and to make sure that nobody knows how to grow.  Finally you have to make sure that the cultural value of the people is one of stealing and looting to make sure that food supply lines are disrupted so that grocery stores cannot stock themselves. you need a complicit regulatory body that will make sure this is enabled.  And you need highly disciplined people that will NOT under any circumstances attempt to feed themselves.  Then you need a closed border so they do not all run away and survive off a neighbor economy..

 

I have no idea how they managed to pull this off I really do not.. Its a pretty amazing feat.

 

 

 

 

 

 

 

In reply to by nmewn

nmewn zebra77a Thu, 03/29/2018 - 10:21 Permalink

And yet the "Chavismo's" like Danny Glover, Sean Penn, Naomi Campbell, Oliver Stone etal...haven't grabbed a hoe and shovel to go back down to help out.

They were perfectly fine running their mouths until it blew up in their faces now nothing. 

But that's what elite socialists (crony or otherwise) do, they never break a sweat preferring to yap all day while others bust their asses trying to implement the elitists grandiose schemes and when the shits in the wind these fuckers are no where to be found. 

In reply to by zebra77a

herbivore nmewn Thu, 03/29/2018 - 10:35 Permalink

What you have, besides a lot of oil, is a land mass in a location alarmingly close to the U.S. (from the U.S. perspective) and that might have some value to Russia. That said, hypersonic missiles on stealthy submarines, if Russia has that, sort of moots land mass proximity, insofar as it advantages a participant in war.

In reply to by nmewn

EddieLomax 52821740 Thu, 03/29/2018 - 09:23 Permalink

Actually even Russia is going to balk at the costs of keeping this socialist party going.

So why doesn't Trump play a game, offer loans to keep them going in return for reforms where they effectively allow capitalism back into the country and a free and fair press and opposition.

They won't take the money, so it will be a cheap way to score a easy win.  The only way Russia can play then is either to walk away or take the losing side of the deal and keep a failing government in power. 

In reply to by 52821740

Offthebeach Jack Oliver Thu, 03/29/2018 - 10:01 Permalink

Need special refineries for Venz tar dirty oil.  Russia no have.  Oil production of low grade, expensive fo refine oil under Peoples Government down by half.  

Best deal for Russia is to keep supporting the Venz oil production DESTROYING government, thus taking oil off world market, and thus Russia oil gets better price.

Just like Russia always paid bills of euro nuclear/coal lefties. Drive the euro cucks( save France ) to suck Russian gas pipes.

In reply to by Jack Oliver

Aussiekiwi Thu, 03/29/2018 - 02:51 Permalink

and if all it’s got is a crypto coin that no one really believes in to pay off debt, loans are likely to be plentiful.

doesn't he mean:

and if all it’s got is a crypto coin that no one really believes in to pay off debt, loans are UNLIKELY to be plentiful.

 

Sorry for being pedantic, but the last sentence was the entire point of the article.

highly debtful Aussiekiwi Thu, 03/29/2018 - 03:16 Permalink

Or the author was simply being sarcastic. When it comes to assessing the way the Venezuelan government is managing its economy, there's plenty of room for that. 

Incidentally, in the old days clueless leaders would try to pay back international creditors with their increasingly worthless national currency. This guy creates a national cryptocurrency and tries to settle his debt with it.

You have to give him credit (pardon the pun) for keeping up with the latest financial trends.

 

In reply to by Aussiekiwi

soyungato Thu, 03/29/2018 - 03:12 Permalink

The human race is sick. The US is fucking sick. How can one justify sanctioning and therefore starving a nation for no reason ? Kids killing each other with machetes to get access to better garbage piles for something to eat. Infants death rate jump 30% for lack of food. That is OK with you Mr. Trump ? I know I know, at least you did not kill them by dropping bombs like in other countries.

TeraByte Thu, 03/29/2018 - 04:23 Permalink

I pay you back in Linden dollars, said Maduro, but Putin stupid as he is, missed an opportunity to make huge gains from such a crypto-currency transaction.

21st.century Thu, 03/29/2018 - 06:13 Permalink

Petroleum Vlad and Petroleum Maduro -- trying to barter with the same resource ?    Venezuela is UN-able to even extract their own oil-- atrophying the knowledge on the alter of socialism ! it's good enough for both of them.