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Venezuela has launched a cryptocurrency in an attempt to bypass tough economic sanctions imposed by the US government.

The "Petro" is intended to bolster the country's crumbling economy, which has been suffering from hyperinflation and devaluation for years.

Venezuela claims it is the world's first sovereign cryptocurrency.

Critics say the move is a desperate attempt by Caracas to raise cash at a time when Venezuela lacks the ability to repay its $150bn of foreign debt.

Opposition leaders said the sale constitutes an illegal issuing of debt, while the US Treasury Department warned it may violate sanctions imposed last year.

The government says the currency aims to circumvent US sanctions on the economy.

President Nicolas Maduro has said each token will be backed by a barrel of Venezuelan crude. The Latin American country has the world's largest proven oil reserves.

A total of 100 million Petros will be sold, with an initial value set at $60, based on the price of a barrel of Venezuelan crude in mid-January.

The official website published a guide to setting up a virtual wallet in which to hold the cryptocurrency, but did not provide a link for actually doing so on Tuesday.

There was also no information on exchanges.

Venezuela's economic crisis has largely been triggered by a slide in oil prices and production, which accounts for 96% of exports.</s>Venezuela has officially launched the pre-sale its new digital currency called the petro.

"Petro is born, and we are going to have a total success for the welfare of Venezuela," President Nicolas Maduro said on Tuesday.

The launch of the so-called cryptocurrency comes as Venezuela faces deepening economic and political crises.

According to the government, the petro is backed by oil, gas, gold and diamonds, and is meant to help overcome US and EU sanctions.

Here is what we know about the new currency.

What is the petro?
• The idea for the petro came from Hugo Chavez, who had foreseen a "strong currency backed by raw materials", according to the government's white paper on the petro.
• Announced in December 2017, the petro is intended to supplement Venezuela's bolivar fuerte (VEF) currency and help overcome US sanctions.
• Petros will be "pre-mined", meaning the government would produce and control it.
• Venezuela has allocated five billion barrels of oil to back its new digital currency, which will be tied to the cost of a barrel of Venezuelan oil.

Where can you buy it?
• Initially, the petro will be sold in hard currency and other cryptocurrencies, not in the local bolivar currency.
• “The presale and initial offer will be made in hard currencies and in cryptocurrencies," Carlos Vargas, the government cryptocurrency superintendent, told state television in late January.
• "It is not going to be done in bolivars at this stage,” he added.
• "Our responsibility is to put [the petro] in the best hands and then a secondary market will appear."
• Vargas also said that after the initial sale, the petro could be sold in exchange for the bolivar.

How much does it cost?
• Each petro will be backed by a barrel of oil and will be sold at the same price, according to the government.
• Prior to the launch, government advisers recommended that 38.4 percent of the petros should be sold in a pre-sale private auction at a discount of 60 percent.

What can you buy with it?
• Vargas said that each petro could be exchanged through the virtual exchange houses, "but in addition to that, there will be many merchants providing goods and services where you can go with your Petro or any crypto currency to exchange it for a service".
• He added: "In a short future Venezuelans can buy in the bakery with the Petro."

Will it help Venezuela's economy?
• At current prices ($62 per barrel) 100m petros could help raise around $6bn. The government argues this could help Venezuela pay part of the country's obligations.
• The Venezuelan minister of foreign trade, Jose Vielma Mora, announced that Venezuela would pay for imports from Brazil using the petro cryptocurrency.
• "A group of Brazilian companies have agreed to receive payment for the sale of food to Venezuela, through petro, starting on February 20, when the pre-sale of the cryptocurrency [begins]," Vielma Mora added.
• None Brazil has not publicly commented on Venezuela's planned use of the petro.
• The opposition-controlled National Assembly has opposed the idea of the petro, labelling it illegal.
• The US also warned that buying the petro could violate sanctions against Venezuela, which prohibit the purchase of newly issued Venezuelan debt.</s>Venezuela Set To Launch The Petro, Its New Cryptocurrency

Venezuela has a severe economic crisis. But rather than a conventional economic overhaul, President Maduro claims that one of the solutions will be a bitcoin-like digital currency.</s>The Venezuelan government has launched its new cryptocurrency, the petro, as the country struggles amid US sanctions and soaring inflation.

Venezuelan President Nicolas Maduro first announced the controversial digital token late last year as a solution to the country's economic woes, however the US Treasury has warned potential investors that buying the petro could violate sanctions that prohibit the purchase of Venezuelan debt, which could dent investor sentiment.

The petro is backed by Venezuela's vast oil reserves, with Maduro previously saying he would issue 100m tokens backed by 100m barrels of oil, giving the digital coin a market value of about $6bn (£4bn). Today, about 82m tokens were initially made available.

“With the Venezuelan bolivar suffering from hyperinflation and the type of volatility usually reserved for the crypto markets, the petro appears to be an attempt to raise much-needed foreign capital. If it does prove a success, expect other governments to quickly follow suit," said Dennis de Jong, managing director of UFX.

"If petro becomes a valuable coin, it would really open the doors for other countries to use the same format and raise funds," added Naeem Aslam, chief market analyst at Think Markets.

However, petro’s success could bring about another round of regulatory crackdowns on digital currencies.

"In our view, if petro goes ahead and the Venezuelan government manages to raise a considerable amount from investors, this could bring more international scrutiny from regulators," said Matthew Newton, analyst at eToro.

Read more: Venezuela's ironic cryptocurrency distraction: the flaws of the Petro</s>Caracas, Venezuela: Crisis-ridden Venezuela is launching an oil-backed cryptocurrency on Tuesday that it hopes will help circumvent US financial sanctions and resurrect the country's moribund economy.

The pre-sale of the "petro," which will represent a barrel of crude from a specific division in the country's Orinoco oil belt, started on Tuesday morning. Investors were offered US$60 "tokens" at discounted rates that they can exchange for petros during what is being dubbed an "initial coin offering," or ICO, in March.

"The petro is born," President Nicolas Maduro said in a video he tweeted late Monday. "We're going with force, and we'll achieve total success for the benefit of Venezuela and the happiness of our people."

Sceptics have expressed doubts that the currency will thrive, mainly because of lack of trust in a government whose debt is being renegotiated and whose policies have brought skyrocketing inflation. In addition, the country's once-thriving oil company, Petroleos de Venezuela S.A. (PDVSA), is producing at its lowest levels in decades.

Some critics also say the project does not make technical sense because the government will have too much space to manipulate the coin.

But proponents believe buyers may find the currency appealing since it is backed by a commodity and an administration with incentives to see it succeed.

Other cryptocurrencies have experienced considerable instability. The value of bitcoin, for instance, soared more than 300 per cent between August and December 2017, then plunged more than 50 per cent to its current level.

The first cryptocurrency officially launched by a government, the petro aims to offer a more stable option and may serve as an experiment for countries such as Russia. Moscow also faces US financial sanctions, and Russian officials have recently toyed with the idea of creating a "cryptoruble."

But many analysts are dubious that the experiment will succeed.

"It honestly sounds like they don't really understand how any of it works," Alex Van de Sande, a Brazil-based developer for the Ethereum Foundation, said in a phone interview.

"Unfortunately, that doesn't mean it won't raise money. We've seen terrible ideas that don't make any sense raise a lot of it," he said. "If I wanted to avoid international sanctions and make money appear out of thin air in my country hiding the origin, I guess this petro would be a useful way."

Jean Paul Leidenz, an economist at Ecoanalitica, a Venezuelan financial consulting firm, said he sees no chance that the project will inspire enough trust to substitute petros for the crumbling national currency, the bolivar, or even pay impending sovereign and PDVSA debts.

In many ways, it is designed to give the government enough space to manoeuver, he said. For instance, it is not clear whether or how buyers will be able to claim rights over the barrels of oil that back the currency, or whether the coins will work as bonds for which holders will be paid once they want to cash their money out.

"The government may still get millions of fresh dollars from Russian and Arab investors," Leidenz said. "But from that to succeeding as a currency? I don't think so."

Indeed, many issues may erode the petro's credibility. Venezuela's opposition-led National Assembly has called the project illegal, arguing that oil assets cannot, by law, be sold, and that the currency is a form of debt that has to be approved by the legislature. Maduro, however, has ignored the institution for years now.

The US Treasury Department also recently told Reuters that buying petros could be seen as "an extension of credit to the Venezuelan government," which could violate sanctions and expose US citizens to "legal risks."

But Mati Greenspan, senior market analyst at social trading network eToro, said in a phone interview that he thinks the petro does have good prospects.

"It's a milestone - an extremely exciting project that has a great chance of working, and is definitely better than continuing with the status quo," he said.

With confidence in the national currency at rock-bottom, the government hopes that backing a currency with a commodity on an open-source platform will engender trust and transparency, Greenspan said. "If Venezuelans adopt it and see it as a force of good, then the crypto community will be there in a flash," he said.

During the initial coin offering in March, the government plans to sell 82.4 million petros to the public at a discount from the official $US60 value. People will then be able to buy petros from those who obtained them during the ICO.

Under the plan, Venezuelans would eventually be able to use the petro to make payments to public institutions, including tax payments, according to official documents explaining the initiative. No more than 100 million petros will be created unless the "Superintendency for Cryptocurrency" approves making more after counting holders' votes, the documents say.</s>Venezuela has launched a cryptocurrency backed by oil in an attempt to bypass tough economic sanctions imposed by the U.S. government. "The 'Petro' is intended to bolster the country's crumbling economy, which has been suffering from hyperinflation and devaluation for years," reports the BBC. "Venezuela claims it is the world's first sovereign cryptocurrency." From the report:</s>The logo for the petro, as seen at a news conference in Caracas last month. Reuters/Marco Bello
• Pre-sale for the petro, a cryptocurrency issued by the Venezuelan government starts on Tuesday.
• The cryptocurrency, first mooted in December, will be backed by oil, gas, gold and diamond reserves in the economically stricken nation.
• It is effectively being launched to help Venezuela circumvent financial sanctions enforced by the USA and EU.

Venezuela's government will launch the first sale of its commodity-linked cryptocurrency, the petro, on Tuesday.

The cryptocurrency, first mooted in December, will be backed by oil, gas, gold and diamond reserves in the economically stricken Latin American nation.

Tuesday's launch comes in the form of a pre-sale, where potential buyers can sign up to get the petro when it officially launches. The token will attract investment from Turkey, Qatar, the United States and Europe, the country's cryptocurrency regulator, Carlos Vargas, told reporters last week.

Venezuela will issue around 100 million petros, equivalent to around $6 billion.

When the currency was first announced, Venezuela's president, Nicolas Maduro said that it will help Venezuela to "advance in issues of monetary sovereignty, to make financial transactions and overcome the financial blockade."

The cryptocurrency is effectively being launched to help Venezuela circumvent financial sanctions enforced by the USA and EU against the country as a punishment for its increasingly authoritarian regime.

"The Venezuelan government is looking to take advantage of one of the key features of cryptocurrencies - decentralisation," Matthew Newton, an analyst at trading platform eToro said in an email.

"Through ICOs, cryptocurrencies have shown that start-ups have been able to circumvent traditional finance and fundraising by reaching a global audience through technology and pitching their ideas directly.

"With petro, we are witnessing this opportunism on a much grander scale, and the first of its kind. Other sanctioned nations will be watching closely as petro could set a precedent."

Initially, buyers will be able to use existing cryptocurrencies like bitcoin, as well as fiat currencies like the US dollar, to buy the petro. They will not, however, be able to use Venezuela's currency, the bolivar.

The bolivar is famously weak after hyperinflation in recent years has left it virtually worthless.</s>Venezuela Set To Launch The Petro, Its New Cryptocurrency

Venezuela's severe economic crisis has led to food shortages, hyperinflation and a collapse of the traditional currency. But rather than a conventional economic overhaul, President Maduro claims that one of the solutions will be a bitcoin-like digital currency.</s>What Is Petro Cryptocurrency?Petro (PTR) is the latest coin to join the cryptocurrency bandwagon. It's the world's first sovereign cryptocurrency as it will be produced and controlled by the Venezuelan government.Though it was announced in December 2017, it was officially launched on February 20, 2018. "Petro is born and we are going to have a total success for the welfare of Venezuela," said Venezuelan President Nicolás Maduro at the launch. (Source: ".</s>Venezuela has undergone a dramatic period of social unrest and economic problems, with a monthly minimum wage of just £5 as inflation looks set top reach 13,000 percent by the end of 2018. But embattled President Nicolas Maduro believes he has a cunning plan to fix his nation’s woes by hopping on the back of the bitcoin bandwagon and creating his very own virtual currency. Launching for pre-sale today, el Petro is the latest cryptocurrency to descend on the market. The announcement of the creation of the new crypto token was made at the end of 2017, as bitcoin hit record highs of $20,000.

The cryptocurrency has since dropped to $11,000, suggesting President Maduro may have missed the crypto boat. But the beleaguered president has pressed on with his plans to launch the new coin - which will be backed by one barrel of oil, the only currency in which Venezuela is still rich in. President Maduro has also promised there will be almost 100 million coins available, to the value of $6billion. Of this sum, $38.4million will go on sale on Tuesday’s pre-sale at a heavy discount to entice new potential investors.

Launching the coin today he said: “Petro is born and we are going to have a total success for the welfare of Venezuela.” The President added it will be a “very busy” day for the government as they will be working on forging strategic alliances. The new cryptocurrency aims to bring a new economic era to Venezuela, which has been blighted by a humanitarian and economic crisis for the past two years. The Petro was created by the Venezuelan Government to counter sanctions imposed on the nation by the United States. It is also hoped el Petro will help to attract investments and generate a new payment mechanism for goods and services. Matthew Newton, Analyst at eToro, said: “The Venezuelan government is looking to take advantage of one of the key features of cryptocurrencies – decentralisation.

“Through ICOs, cryptocurrencies have shown that start-ups have been able to circumvent traditional finance and fundraising by reaching a global audience through technology and pitching their ideas directly. “With Petro, we are witnessing this opportunism on a much grander scale, and the first of its kind. Other sanctioned nations will be watching closely as Petro could set a precedent. “In our view, if Petro goes ahead and the Venezuelan government manages to raise a considerable amount from investors, this could bring more international scrutiny from regulators. “However, this will also enhance the power of cryptocurrencies’ decentralised component. “If sovereignty is enhanced through cryptocurrencies, and regulators are unable to do anything about it, what more is there left to prove? Cryptocurrencies will be truly decentralised.”
Venezuela launches its Petro cryptocurrency, which it claims is the world's first sovereign cryptocurrency.