Venezuela's opposition party has called the recently announced Petro cryptocurrency as an effort to mortgage country's oil reserves illegally. The leaders have outlawed the cryptocurrency which is promoted by President Nicolás Maduro Moros.
Cryptocurrency experts say Venezuela's economic mismanagement will leave the investors uninterested in the crypto currency. According to the Legislator Jorge Millan, “This is not a cryptocurrency, this is a forward sale of Venezuelan oil. It is tailor-made for corruption.”
Nicolás Maduro Moros, who is up for re-election this year, thinks his government would issue Petro worth $6 billion as a way to raise hard currency and to evade financial sanctions forced by Washington. He believes that the currency will serve as a payment mechanism for foreign suppliers. Legislators have warned investors that the petro might be seen as null and void once Maduro is out of the office. They have added that the Petro issue will go against constitutional requirements that the legislature approves borrowing.
According to the U.S. President Donald Trump, the new Constituent Assembly is a consolidation of a dictatorship. However, U.S. financial institutions have blocked Maduro’s government from refinancing its hefty debt burden. Backed by 100 million barrels of oil reserves, the cabinet now plans to issue 100 million petros in the days to come. Interestingly, the petro price closed at $59.07 last week.