Petro, the Venezuelan state-sponsored oil-backed cryptocurrency, will be offered to prospective buyers beginning tomorrow, after President Nicholas Maduro had announced the idea in December of 2017.
The Petro is largely a bid to try and counter the country's economic distress that it has been enduring for some time now, with effects such as hyperinflation. According to the Venezuelan government, the cryptocurrency will make it possible for the country to gain access to some hard currency, that it is in a desperate shortage of.
Tomorrow's pre-sale is the start of a process that will lead up to the larger Initial Offer, which, according to the government's White Paper on the topic, will be at a later date dependent on the pre-sale. "ERC20" tokens will be created and sold using the Ethereum platform for the pre-sale phase. The pre-sale will end once the 82,400,000 units of the pre-sale are sold. The Venezuelan government thinks that not only will the Petro help in countering sanctions, but may also do wonders in creating a digital, transparent economy, or as it explains in the White Paper:
Its launch will spearhead the promotion of an independent, transparent digital economy, open to direct citizen participation, which will serve as a platform for the development of crypto assets and innovation in Venezuela and other emerging countries with great potential.
The U.S. government has said that any purchasing of the Petro may still be in violation of the economic sanctions placed on the country, as it represents "an extension of credit" to Venezuela. The sanctions are against the purchasing of any recent Venezuelan state debt. Nonetheless, Carlos Vargas, the country's cryptocurrency regulator has said that there has been much interest from investors from Qatar, Turkey, Europe, and even the U.S.
The Petro will be backed by oil found in one of the country's large natural reserves, making it very different from the major cryptocurrencies, such as bitcoin, because it is backed by a real world commodity. However, even the most established of cryptocurrencies have already had quite a tumultuous start to 2018 for a variety of reasons, so there is no guarantee that the Petro will be a roaring success.
Nonetheless, global investors and both the U.S. and Venezuelan governments, will undoubtedly be keeping an eye on tomorrow's pre-sale.