Venezuela has launched a preliminary sale of Petro tokens backed by national resources. Venezuelan President Nicolas Maduro's hopes that a national cryptocurrency, will help to carry out financial transactions to bypass Western sanctions. Experts ' opinions were divided.
The United States and European Union have imposed sanctions against Venezuela because of a disagreement with the level of democracy in the country. Last year, the Economist, a publication on the democracy index in various countries, moved Venezuela from a position of "transitional regime" to "authoritarian regime" because of "a strong bias towards dictatorship."
The Venezuelan Petro token will be supported, according to the government, by oil, gas, gold and diamond national reserves. On Friday, the regulator said that as part of the ICO campaign, the country will attract investments from Qatar, Turkey and other countries of the Near and Middle East, as well as Europe and the United States.
In the early stages, the purchase of tokens for the national currency of the country will not be possible. The Bolivar has collapsed, and the government is trying to overcome the growing hyperinflation.
Many doubt that the company with cryptocurrency will benefit the Venezuelan economy and its citizens who lack food and medicine because of the policy of price containment. According to CNBS, Francisco Toro, Venezuelan journalist, political scientist and blogger Caracas Chronicles, said that Venezuela turned to cryptocurrencies from "despair" associated with economic isolation from the United States.
"They tried to find various solutions to circumvent sanctions against money laundering, and cryptocurrency can be one of the possible ways," said Francisco Toro.
"I believe that part of the point is to get investment from non-traditional creditors, Russia and China, who can invest some of the money and provide loans in cash. Economic sanctions, US and European sanctions are not the main reason why Venezuela cannot attract financing. The main reason is that macroeconomics is a show»
In addition to four-time inflation, Venezuela is also experiencing an oil crisis due to the reduction of oil production by 29% in 2017. Many fear that the consequences of the Venezuelan oil fall will increase the risk of default on national debts. According to Francisco Toro, the country's economic difficulties have caused a low credit rating, while the government is trying to convince itself of the correctness of following chavism, the political ideology of the left-wing, born on the basis of the ideas of Hugo Chavez.
"This idea that the sanctions cut the demand and the need to circumvent sanctions is the chavismo who is drinking their own Kool Aid (brand of soda - approx. ed.) and believes his own propaganda," says the journalist.
However, senior market analyst at eToro, Mathi Greenspan, holds a different opinion, believing that the issue of Petro – is "a great idea", and can be a precursor to the emergence of similar projects from other world leaders, including Russian President Vladimir Putin.
"Putin and Maduro are experiencing similar difficulties. Both are largely dependent on oil prices, which were quite volatile over the last few years. Both have problems with us sanctions and the fact that the us dollar is the world's reserve currency... only to think, among all the governments and banks playing with the idea, Nicolas Maduro turned out to be the first. I guess the desperation feeds innovation," he wrote in a letter to the resource CNBC last week Mattie Greenspan.
Greenspan also praised the plan, Maduro reinforce Petro token national reserves. The analyst believes that" this is a great idea to back up the cryptocurrency with solid raw materials, as the world is now flooded with nothing supported by money", and is also surprised that the initiative" received very little support from the crypto community", linking this with the fact that"Venezuelans themselves have not yet decided on the attitude to the idea".
"In any case, I believe that Petro is aimed at attracting institutional investors and governments of other countries. They have more available than cryptomelane anyway. Regardless of the outcome of the project, it will be an excellent pilot for Putin," — said grinspan.
Toro also expressed doubts that other countries, especially Russia, would look towards the Venezuelan cryptocurrency as an inspiring example in the development of their own projects:
"There are scientific institutes in Russia. And if Russia decides to launch a cryptocurrency, they will not copy the experience of some banana Republic.»
However, not only sub-banking countries are considering launching national cryptocurrencies. For example, Sweden may release a digital version of the crown "ekrona", and countries such as Japan, Singapore and Estonia are already looking for alternatives to traditional currencies.
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