Venezuela is currently suffering a quadruple-digit inflation led by chronic shortages of food and medicine. This has have spurred increased incidents of preventable diseases and malnutrition.
President Nicolas Maduro says that his government by opposition politicians with the help and support of the U.S. President Donald Trump, is the victim of an “economic war”.
There were sanctions that were levied last year by Washington. According to them, U.S. banks and investors are blocked from acquiring newly issued Venezuelan debt. This effectively prevents the struggling nation from borrowing abroad. Hence they cannot bring in new hard currency or refinance existing debt.
With Venezuelan currency facing a lot of trouble the government of President Nicolas Maduro has decided to sell a new cryptocurrency called, Petro. On Friday, the country’s cryptocurrency regulator said, the country’s new “petro” cryptocurrency is going to attract investments from the Europe, United States Turkey and Qatar.
The government has scheduled the first Petros sale for Tuesday. It also said that the Petro will help skirt financial sanctions by Washington. Looking at Venezuela’s financial solvency the skeptics are concerned. According to them, the economic state of the country will likely limit investor interest. The U.S. Treasury Department has also warned that this new currency may violate sanctions against the OPEC nation.
“On Tuesday, there will be quite a few announcements about the start of the process,” Venezuelan Cryptocurrency Superintendent Carlos Vargas said on the sidelines of a political meeting in Caracas. “And there will surely be a lot of investors from Qatar, Turkey, and other parts of the Middle East, though Europeans and Americans will also participate.”. He did not elaborate.
Full details about the Petro have yet not been provided by the Venezuelan government. However, there have been recommendations from the advisers working for the government. They say that 38.4 percent of the petros should be sold at a discount of 60 percent in a private auction.