President Maduro Introduces Petro Oro
After a seemingly successful $735 million raised on the first day of sale of the oil-backed Petro (one unit of the Petro is worth one barrel of oil), the Venezuelan President Nicolas Maduro has now hinted at the launch of a gold-backed Petro Oro, as reported by Venezuelan news portal TeleSUR. “[unofficial translation] The Petro is a cryptocurrency unique in the world that has support in oil, and I have a surprise that I will launch next week, The Petro Oro, backed by gold, even more powerful.”
To big problems, great solutions! [translated]: President Maduro’s Tweet as he announced the initial results of the Petro sale.
A grandes problemas, ¡grandes soluciones! Desde el primer minuto el juego arrancó bien, y arrancamos ganando: 4.777 millones de yuanes o 735 millones de dólares es el resultado inicial de las operaciones de intención de compra del Petro. #AlFuturoConElPetro pic.twitter.com/LoaDgj4rr1
— Nicolás Maduro (@NicolasMaduro) February 21, 2018
Now the President is set to take another step in this direction with the announcement of the Petro Oro.
Initiatives such as Petro and now Petro Oro are much needed in an economy experiencing hyperinflation (741% YoY in Feb 2017), with its currency the Bolivar, down 96% in value. 10-year bond yields for the country’s bonds were showing 10.43% on February 21st, indicating the poor credibility of the nation. The economy is in need of immediate restoration, and the President has thus called upon the Venezuelan population, especially young people, to work towards making the Petro projects successful.
The move is expected to serve the Venezuelan economy in more ways than one:
- With the Venezuelan fiat- Bolivar – steeply down in value, Petro and Petro Oro should help provide the economy with the necessary strength from the world of cryptocurrencies.
- It could help Venezuela tackle the economic blockade imposed by the U.S., the European Union (EU) and its regional allies against the South American nation. President Maduro sees it as the alternative world which could enable Venezuela to break the financial blockade and to create a solid monetary and financial base for the creation of powerful intra-regional trade networks.
Presidente @NicolasMaduro: “They have wanted to demoralize the people with the economic war. I offer you renewed hope through social missions, El Petro and work. Because the only true future is that which arises from our work and our love.” #AlFuturoConElPetro pic.twitter.com/GZzHenn1NI
— Consul Vzla HongKong (@ConsulRBVzlaHK) February 21, 2018
President Maduro’s social missions such as the El Petro and work opportunities are focused attempts to save his people from becoming demoralized with the economic war that is in place. But are they credible?