As Bitcoin mania took over the world, governments the world over considered launching their own digital currencies. However, none actually took the leap until now. The government of Venezuela, a South American country, has launched its own form of cryptocurrency, the ‘Petro’, on Tuesday.
Amid the country’s rising economic crisis which has led to hyperinflation and a worthless national currency, the government is issuing the Petro in an effort to bolster the economy.
Venezuela holds the world’s largest oil reserves and the government is backing the Petro with its oil barrels. As the bolívar, the fiat currency of Venezuela, has failed, the government will accept the Petro as payment for things like national taxes and public services.
According to expert estimations, Nicolás Maduro;s government is aiming to raise more than $2 billion with this move.
Moreover, like any other token sale, the government has released details of the areas in which it intends to use the funds. As the whitepaper shows, 38% of the coins are reserved for a discounted closed-door presale, while 44% will go for the public offering. The government will distribute the remaining 18% to the Superintendency of Currency and Related Activities. In total, the government will issue 82.4 million Petros. However, the digital coins are not redeemable for barrels of crude oil.
According to reports, the government made $735 million on the first day of pre-sale.
The government will sell Petros for both fiat currencies and other cryptocurrencies, but it will not accept the bolívar – it seems that the government lost interest in its own currency. The authority will also enable atomic swaps to remain independent from the third-party crypto exchanges.
Source: Finance Magnates
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