A new report indicates that Venezuela will back the Petro cryptocurrency with 30 million barrels of oil as opposed to the 5 billion that had earlier been announced. The oil is located in storage tanks as opposed to the initial 5 billion barrels, which was located in oil fields.
According to Maduro, the nation’s president, these 30 million barrels will be delivered as a physical material that will back the Petro. During the announcement, he also claimed that the oil was available for immediate commercialization. However, he did not give a detailed account of how the sale of oil inventories would be used to directly back the Petro.
The 30 million barrels is significantly less than the initial 5 billion barrels the nation had earlier announced when the Petro was first unveiled. When Reuters conducted an investigation into the nation’s Petro in 2018, it could not find any framework that backs the Petro. For instance, they could not trace the official who was supposed to be in charge of the Petro. They could also not find any actual users of the Petro in Venezuela. When they visited the oil fields that were supposed to back the Petro, they could not find any signs that there were ongoing efforts to retrieve the oil. Recent estimates claim that Venezuela had oil inventories of about 39 million barrels by the end of October 2019.
Venezuelan officials have been working hard to promote the use of the Petro inside the country. Authorities recently claimed that there were dozens of retailers accepting payment in the Petro. However, Reuters could not find any sign of large-scale use of the Petro during its 2018 investigation. It is also worth noting that the Petro is not listed on any crypto exchange in the world.
The nation turned to digital currencies after the nation’s economy tanked due to hyperinflation. Most Venezuelans already own crypto coins such as BTC, which they have been forced to turn to after the collapse of the nation’s fiat currency. It is also an attempt by the nation to avoid US sanctions, which have made things worse for the economy.