Venezuela launches digital currency

The new Venezuelan cryptocurrency Petro logo is seen during its launching in Caracas Venezuela

"Within the framework of policies to strengthen monetary sovereignty and promote welfare by bringing power closer to its citizens, the government of the Bolivarian Republic of Venezuela has chose to embark on an ambitious project for the future, with the vision of turning the country into a blockchain-based solutions development hub for emerging economies", the site noted.

The Vice President of Venezuela, Tareck El Aissami, presented the operating mechanism for the acquisition and commercialization of the petro.

The cryptocurrency was created in an effort to circumvent the financial sanctions against Venezuela, the US and the European Union.

Squinting the eyes and suspending disbelief might just make the petro look like a decent investment to some.

The country's currency bolivar has recently dropped to record lows.

The Venezuelan government has outlined its plans and expectations for the petro in a website built for the cryptocurrency and hosted by the country's Ministerio del Poder Popular para Educacion Universitaria Ciencia, Tecnologia (MPPEUCT).

The bolivar is nearly worthless because of the hyperinflation that has plagued the economy in recent months. The president has said multiple times in the past that the country's cryptocurrency will enable it to circumvent Western sanctions.

Cryptocurrency experts are looking at Venezuela's foray into digital currencies with a mix of intrigue and suspicion, excited by the prospect of a government willing to accept cryptocurrency for payments like taxes but also concerned about the potential lack of oversight. However, the initiative has attracted stark criticism, including from lawmakers both inside and outside of the country.

The official website for the petro on Tuesday published a guide to setting up a virtual wallet to hold the cryptocurrency.

For months the opposition has tried to negotiate more favorable terms with the government through a series of meetings in the Dominican Republic, part of an global effort to remedy the country's bitter political crisis. Officials have said that with the creation, they hope to attract investments from several countries, including the USA and Europe.

In the first year, the Venezuelan government will release 100 million petros, according to the AP report.

However, no new price information was supplied on Tuesday. This decision is taken in an attempt to coubter economic sanctions imposed by the U.S. government. The tokens are each created to be valued at and backed by a barrel of Venezuelan crude oil. This prevents the country from borrowing overseas so that it can bring in new hard currency or refinance existing debt.

The white paper notes that the tokens sold at pre-sale are actually assets on the NEM blockchain and not the tokens that will function on the Petro network.

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