Venezuela’s Petro Cryptocurrency Brings in $5 Billion, According to President Maduro

Venezuela’s state-backed cryptocurrency, the Petro, has been a resounding success, according to President Nicolas Maduro. The leader claims the oil-backed token has raised $5 billion through the first leg of its pre-sale, signaling strong appetite for state-run digital assets.

Petro Pre-Sale

Local news agency TeleSUR reported Friday that 186,000 certified purchases for Petro have been made. The agency quoted Maduro, who issued the announcement with fellow members of the United Socialist Party of Venezuela.

Maduro said the funds raised from the Petro pre-sale will be used to “service everything our country needs.” He also described the cryptocurrency as part of a broader “economic solution” to save a crumbling economy.

Carlos Vargas, the country’s crypto chief, said more than 83,000 individuals from 127 countries have participated in the project, including 3,523 entrepreneurs.

Petro: The Controversy Grows

Maduro has dropped several hints about the success of the Petro crowdsale, although the voracity of the claims has been difficult to judge given Venezuela’s perilous economic condition. Last month, the president said the Petro raised $735 million in its opening day.

The cryptocurrency was created as a way to sidestep U.S.-led sanctions against Maduro’s socialist government, but skeptics say it is merely a ploy by the regime to cover its burgeoning debt.

If Maduro’s claims are true, it looks like Venezuela could be on its way to a crypto-bubble bailout. But the cryptocurrency itself may be worthless in the long haul unless investors suddenly start coveting Venezuelan fiat money. (Basically, Petros are said to be backed by oil, which means you can exchange the tokens for local currency.)

The token itself has also generated significant opposition within Venezuela, with the country’s opposition-run congress calling the pre-sale “illegal and unconstitutional.” They believe the cryptocurrency is being used to mortgage their nation’s energy reserves.

In other news, Venezuela’s state-run oil company Petroleos de Venezuela SA (PDVSA) is reportedly suing U.S. energy trading companies for bribery. PDVSA claims that Helsinge, a Florida-based firm, attempted to bribe a Venezuelan state official into selling petroleum products at a discount. The lawsuit also claims that two of PDVSA’s former employees were also behind efforts to rig bid proceedings.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. 

Chief Editor to and Contributor to, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi