The cryptocurrency issued in Venezuela is, according to the government of Nicolás Maduro, the first launched by a State, although countries such as Estonia and Dubai have already stated that they also have similar plans.
In full fury of cryptocurrencies, led by bitcoin, and in the middle of a severe economic crisis, the socialist government of President Nicolás Maduro took a bold new decision that began to work officially on Tuesday with the pre-sale phase.
The government resorts to it as a source of financing at a time when its income has fallen due to low production and the reduction of oil prices, the main and almost only source of foreign currency to the country.
Added to this are the financial sanctions imposed by the United States that prevent it from issuing new debt or refinancing through the institutions of that country.
Backed by Venezuelan crude oil, the petro represents a "change of time in the financial world," said Minister of Science and Technology, Hugbel Roa, on Tuesday.
Although the analysis of their technical data still leaves many unknowns, these are 6 keys that serve to explain what is currently known about the petro.
- Who can buy it, how much is it worth and how much can I change it?
Whoever wants it can, from this Tuesday, state his intention to buy petros. In this pre-sale phase the idea is to check the appetite of the market.
The superintendent of Venezuela's cryptocurrencies, Carlos Vargas, said last week that the government hopes to attract investors from Qatar, Turkey, as well as countries in the Middle East, Europe and the United States in the pre-sale of its digital currency.
Each petro has as its reference value the price of a barrel of oil, of which Venezuela is considered the country with the largest proven reserves in the world.
That does not mean that each petro equals a barrel, but that the value of the petro is linked to that of the Venezuelan crude.
Taking this into account should now be around $ 60, but the sale price of the petro will still depend on an agreement between those interested in presale and the government.
As announced, 100 million petros will be issued, so the total value of the issuance is estimated at about 6,000 million dollars. According to the White Paper, which regulates the operation of the currency, this Tuesday began to sell 38.4 million cryptoactives.
That White Paper indicates at the outset that the offer is fixed, but it is also said that the petro will be able to be mined if the users agree to it.
The document also states that when someone wants to change their petroleum, the price of a barrel will be paid, but in bolivars, the Venezuelan national currency, very devalued by the hyperinflation that crosses the country.
The highest denomination ticket, the 100,000 bolivars, is just equivalent to less than $ 0.50 in the parallel exchange market.
The change to bolivars will be made in exchange platforms authorized by the government, of which few details are known at the moment.
Its value will lie, above all, according to Laura Rojas, an expert in digital finance, on the promise that a market will be created in Venezuela and "may be used later to pay taxes and public services," he tells the BBC World.
That, together with the government's promise that it will endeavor to promote its international use through, for example, the state-owned PDVSA, which will have to pay part of its transactions in Petros.
- Is it really a cryptocurrency and how is it different from bitcoin, the most popular one?
Yes, the petro is one of the hundreds of cryptocurrencies that exist and of which bitcoin is the best known.
The main difference with bitcoin is that the petro will be centralized by an intermediary, in this case the government of Venezuela, while the bitcoin is completely decentralized. It does not belong to anyone, it is not regulated by governments, banks or investment funds.
Another difference is the mining. Bitcoin can be generated by anyone with the right equipment. The petro, according to the White Paper, that will depend on whether the users agree because initially the supply is 100 million.
The petro is not the first digital currency issued by a centralized entity, such as a company.
"From here we follow established and predetermined rules that do not allow the value or the offer to be handled discretionally," says Rojas.
- What is the government looking for?
The Venezuelan government, with income problems, in the middle of a serious crisis and pressured by the financial sanctions of the United States, launched the petro and promoted it as a solution to be able to finance itself and solve the many evils that plague its economy.
Among the objectives is to create an alternative currency to the dollar and a digital and transparent economy for the benefit of emerging countries and away from the global financial system, controlled from EEUU He wants Venezuela to be "a global reference of sovereignty in front of the big global financial centers". With the petro, in addition, the government looks for an income that it does not find now. In April it will have to face new payments of debt that it can not refinance due to the sanctions of the United States. Imports from a foreign dependent country have fallen and this is part of the explanation of the lack of food and basic products. in a context of a continuous fall in oil production, almost its only source of dollar inflows, which has not even allowed it to take advantage of the increase in the price of the barrel in recent months. "The cryptocurrency is strengthening our economy", affirmed President Maduro on Monday, without giving further details. "We will have total success," he ventured. According to the White Paper, 55% of the revenues collected will go to a sovereign fund that the government may use discretionally.4. Is it an instrument to issue public debt? It is the great criticism made by the opposition. The parliament, controlled by Maduro's rivals, has declared the petroleum illegal. The economist and opposition deputy of the National Assembly, José Guerra, believes that the petro is not a cryptocurrency and that it resembles more a public debt bond. Guerra, the creation of the petro is "a debt operation that tries to avoid parliamentary control," he said in a recent television interview. In addition, he referred to it as a "highly risky" investment. "If the government thinks that using petro will get financing that it can not have today, it will be wrong," he added. The new issue of debt, in accordance with the Constitution , must be backed by the National Assembly, the legislative chamber of the opposition majority, which refuses to increase the enormous debt of the country. And to that is added that the United States prevents the debt to be refinanced or issued new through its territory and its institutions.
Does it serve to circumvent US sanctions? The idea of the petro is to be able to obtain financing outside the US influence circuits that both the Executive and the state oil company PDVSA have now closed. However, the Treasury Department has already warned to all those interested in investing in the petroleum. "A currency with these characteristics seems to be an extension of credit to the Venezuelan government (...) Americans who become involved with the future Venezuelan digital currency may be exposed to US sanctions" , .This could be a deterrent for those who are initially interested in acquiring petros.Las Rojas believes that this is the main objective of the government of Venezuela: "Lift the siege of sanctions to get money." "In the world This pre-sale is an innovation with respect to traditional formulas to raise capital, a company that starts or resorts to the sale of shares or issue debt to raise capital when you have a project that is starting, "says Rojas. Issuing cryptocurrency is an alternative. "The government of Venezuela was mounted on that wave," says the expert.
Will it succeed? The government already states that it will have it, but there are still many doubts in the White Paper, still lacking specific key data. President Maduro spoke on Tuesday of having registered in the pre-sale an intention to purchase value of 735 million dollars in only 20 hours since its launch. For the success, trust will be key. The government itself is the issuer and the one that promises to buy them back. And it will do so in a context in which several credit agencies have spoken of default (or default) selective for the delay in the payment of interest on some debt bonds. And in addition, Venezuela will continue to have blocked markets. This situation could be aggravated by a presidential election on April 22nd that a large part of the international community will ignore because they do not consider it to be fair and that the majority of the opposition will boycott. "With a cryptocurrency, you do not sell shares or bonds. The investor does not have any legal right over the project he invests in. All he has is confidence that he will develop the project according to what has been said, "Rojas explains to BBC Mundo.This is what makes all cryptocurrencies a "highly risky" investment. "If, in addition to that, the issuer does not tell you what it is going to do, it is hard for me to think that there are serious investors behind the petro," says Rojas.