Venezuelan Congress Invalidates Petro Cryptocurrency

Days after President Nicolás Maduro announced the issuance of 100 million petro coins, the opposition-run Venezuelan parliament decreed that the proposed cryptocurrency violates the constitution, as borrowing must be approved by the legislature.

On Tuesday, the Venezuelan parliament, the Asemblea Nacional, prohibited President Nicolás Maduro’s project to create and sell a state-sponsored, oil-backed cryptocurrency called the “petro.”

Last Friday, Maduro gave an official order for the issuance of 100 million petros, each equivalent to the value of a barrel of Venezuelan oil (approximately $59.07). At that price, the 100 million petros would create roughly $6 billion for the cash-strapped economy. On Friday, Maduro also called for a meeting of petro miners – set for January 14, 2018 – where he plans to reveal the petro whitepaper.

Opposition lawmakers are appalled by the president’s strategy and now, the Venezuelan Aseamblea is calling the petro an attempt to illegally mortgage Venezuelan oil reserves. Government borrowing, lawmakers said, must be approved by the legislature. Legislator Jorge Millán said:

“This is not a cryptocurrency, this is a forward sale of Venezuelan oil; it is tailor-made for corruption.”

The parliament told would-be investors that the petro would not be acknowledged after Maduro leaves office. He is seeking re-election this year.

In August, Venezuela elected the controversial Constituent Assembly, an all-powerful entity comprised entirely of government supporters, to back up Maduro’s government. That same month, the Constituent Assembly voted in favor of assuming the powers of the regular parliament (Asamblea Nacional), but thus far its actions still carry little weight with global entities, which still regard the Asemblea as the legitimate constitutional authority.

Maduro first announced the oil-backed petro in a televised speech in early December.

Matthew is a writer with a passion for emerging technology. Prior to joining ETHNews, he interned for the U.S. Securities and Exchange Commission as well as the OECD. He graduated cum laude from Georgetown University where he studied international economics. In his spare time, Matthew loves playing basketball and listening to podcasts. He currently lives in Los Angeles. Matthew is a full-time staff writer for ETHNews.

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