Skip to main content
Petro to be Presented as ‘Digital Currency for Oil’

Petro to be Presented as ‘Digital Currency for Oil’

in Bitcoin & Cryptocurrency published on 14, November 2018

Venezuela’s oil-backed cryptocurrency, the Petro, is to be presented to the Organization of the Petroleum Exporting Countries (OPEC) in 2019, as the government pushes for international recognition of its controversial cryptocurrency.

The Petro, a digital currency similar to bitcoin, is backed by Venezuela’s oil reserves. However, the currency has been widely criticized internationally, not least because of prevailing US-led economic sanctions against the country.

Manuel Quevedo, the Venezuelan minister of petroleum, who is also president of PDVSA, the state oil company, said petro would be presented as a basis for oil transactions, with a view to securing international support.

 “Petro will become the digital currency of oil transactions worldwide; we will present it to OPEC, it is one of the internationalization measures of the currency.”

Going further, he insisted that Venezuela would only be selling in Petro in future. According to media sources in Cuba, the measure is designed to allow Venezuela to sell oil, despite existing economic sanctions which effectively prevent trade in fiat.

“The gasoline for planes, ships, we will be selling it in Petros. It is the currency of Venezuela.”

The petro was pegged to the country’s new currency, the sovereign bolivar, back in July. In October, the Venezuelan government began the pre-sale of the token, which is now required by the government as payment for a number of functions, such as obtaining a passport.

The minister for petroleum has also encouraged airlines and shipping companies to create petro wallets, in advance of trading for fuel in the cryptocurrency in future.

The development and launch phase of the cryptocurrency has been somewhat opaque, with suggestions of technical problems, inflated pre-sale projections and accusations of illegality, both at home and internationally.

Despite the criticism, the extreme left-wing government of Nicolas Maduro has continued to push ahead with the plans, in a bid to alleviate the impact of international sanctions.

As Venezuela continues to struggle under the economic burden of these sanctions, it remains to be seen whether the presentation of the petro at OPEC will help them achieve this end.