Venezuela is to sell its oil in petro, the controversial state-backed cryptocurrencies, from 2019, in a move designed to avoid the US dollar and US-led sanctions.
The petro token will be the exclusive currency for oil sales in the new year, according to President Nicolas Maduro, in a move he described as diversifying the global market away from its reliance on USD.
According to a statement in the local press, the president said the switch would free Venezuela from the shackles of US currency dominance, and help fuel a wider plan for economic recovery in the struggling nation.
“In 2019, we have a schedule for [oil] to be sold in petros and in this way continue to free us from a currency that the elite of Washington uses.”
US-led sanctions against Venezuela have resulted in significant economic hardship in the country, with the controversial president suggesting he has a six-year plan to move towards the token, which is backed by state oil reserves.
Maduro said the government was working towards ensuring all exports would eventually be sold in petro, which would allow the country to mitigate the impact of its current exclusion from global financial systems.
The petro project has drawn condemnation from the international community, as well as from opposition politicians in Venezuela. Indeed, some politicians suggest the petro is even unconstitutional and therefore illegal under Venezuelan law.
The announcement follows last month’s commitment from senior ministers to present the petro at oil consortium OPEC, with a view to encouraging trade in the oil-backed cryptocurrency.
The petro was made available in presale back in February, with citizens able to buy petro from October of this year, as the currency becomes more woven into the payments fabric of life in Venezuela.
The announcement of the plan comes days after President Maduro returned from Moscow following a meeting with Russian President Vladimir Putin, one of Venezuela’s few remaining global allies.
While the petro token has been the subject of much debate, it shows how cryptocurrencies could be issued and rolled out by governments in future – even if the circumstances would be expected to be somewhat different.