Venezuela, which is suffering one of the most severe economic collapses of modern times, is unveiling an oil supported digital currency on Tuesday. The country hopes it will dodge U.S financial sanctions and hope it will resuscitate Venezuela crumbling Economy
The pre-sale of the coin currency “Petro” which stands for a barrel of crude from a precise division in Orinoco oil belt commenced Tuesday morning. During an Initial Coin Offering (ICO), investors have issued $6o tokens at discounted rates in exchange for Petros.
President Nicolas Maduro announced the birth of the crypto in a televised event late on Monday. According to the president, they have started with a great force, and he is sure that the digital coin will achieve success for both the nation and its citizens.
Will The Coin Currency Thrive?
Skeptics have expressed doubts on the success of the coin currency due to lack trust to a government whose debt is under negotiation and its policies have led to a worsening inflation. To add on that, Petróleos de Venezuela S.A.(PDVSA), the country’s once successful oil company is currently producing at lower levels in decades.
According to some critics, the project lacks any technical sense primarily because the government will have enough space to influence the coin currency.
The Perception of Traders on The Cryptocurrency
Proponents believe buyers will find the coin currency attractive as both a known commodity and an administrative support it accompanied with incentives to make it succeed.
Other digital currencies have expressed their share of instability. For example, the value of Bitcoin skyrocketed more than 300 percent between August and December 2017 and eventually dropped by 50 percent to its current level.
Petro is the first digital currency to be unveiled by the government, and it intends to provide a stable alternative and work as experiments to countries like Russia. Just Like Caracas, Moscow faces the challenges of U.S financial sanctions, and on that note, Russian officials have recently supported the idea of developing a “cryptoruble.”