With most governments regularly issuing warnings against cryptocurrencies, Venezuela, on Tuesday, became the fist government to issue its own cryptocurrency, with the pre-launch of the Petro. President Maduro announced on Twitter first-day presales of $735 million, though news outlets reported that the figure could not be substantiated. The Venezuelan government says that each unit of the petro is pegged to the price of one barrel of Venezuelan oil.
Many questions have been raised about the Petro. It has been opposed by opposition legislators in Venezuela’s opposition-controlled legislature. They say that the Maduro government is essentially issuing oil-backed debt, and that cannot be done legally without approval from the legislature. For its part, the U.S. Treasury has warned U.S. investors to approach the Petro with caution, saying that it may contravene U.S. sanctions against the Venezuela. And, of course, the whole concept of a top-down, government controlled asset is the antithesis of the decentralized system that is the centerpiece of the appeal of cryptocurrencies to the purists.
Nevertheless, the Petro will undoubtedly be watched closely as other governments, most recently Russia and Turkey, are actively discussing issuing their own cryptocurrencies.
