Venezuelan President Nicolas Maduro is reportedly claiming success in his effort to raise much-needed capital through the sale of his country’s controversial digital currency, the petro. Pre-sales for the coin began on Tuesday, and Maduro quickly took to Twitter to announce that investors had pledged $735 million dollars’ worth of yuan.
According to Maduro’s government, the petro coin is backed by Venezuela’s oil reserves – with each coin backed by exactly one barrel of oil. In announcing the cryptocurrency plan, Maduro suggested that 100 million of the coins would be made available at an initial price of $60 for each petro.
The plan has been criticized by Venezuelan lawmakers, who have declared it to be nothing more than a “forward sale of Venezuelan oil.” They have vowed to nullify the project as soon as Maduro is no longer in charge. Observers outside of Venezuela have been just as critical. The U.S. government has warned investors to avoid the petro, and some have noted that it isn’t really a cryptocurrency since it is not decentralized.
Meanwhile, Longview Economics senior economist Harry Colvin told CNBC earlier this week that he had his doubts about the petro’s chances for success:
"Venezuela has been known for misappropriation of assets in the past and the central bank has just created hyperinflation so I imagine there'll be trust and transparency issues."