Venezuela has set a date for the launch of its new national cryptocurrency, the petro, in one of the first mainstream moves of its kind.
Announced on Wednesday by President Nicolas Maduro, the petro will go on presale as early as next month, with several additional measures being introduced to support the launch of the innovative currency solution.
The petro, which will be backed by Venezuela’s natural resources, has been designed as a mechanism for getting around international sanctions, which the government hopes can bring much-needed revenue into state coffers.
According to the details of a white paper signed earlier this week, the petro will be synchronised with a new scheme linking the currency to national ID cards, in a move that would make its use more convenient for ordinary Venezuelans.
The president also announced that several new mining centres would be created, ensuring adequate inflows of new tokens. Speaking to state TV, Maduro was bullish on the prospects of the new petro token.
“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,” the Venezuelan president said.
Venezuela has experienced significant economic and social unrest in recent years, culminating in intensifying international sanctions against the nation. This has had a serious detrimental impact on the economy of the resource-rich South American country.
But while the move into cryptocurrencies is an innovative attempt to answer the economic problems facing Venezuela and, in particular, to evade sanctions imposed by the U.S., the petro doesn’t enjoy full support.
The Venezuelan Congress, which is controlled by opposition representatives, have brandished the petro an ‘illegal’ venture, which they say is in contravention of laws requiring the approval of government borrowing.
Similar criticisms have emerged from the U.S., with Senators Marco Rubio and Robert Menendez highly critical of the plans in an open letter to the U.S. Treasury Secretary.
“It is imperative that the U.S. Treasury Department is equipped with tools and enforcement mechanisms to combat the use of cryptocurrency to evade U.S. sanctions in general, and in this case in particular,” the letter stated.