Gold and other precious metals will back the new cryptocurrency.
“Next week I'm going to launch the Petro gold, backed by gold, which is even more powerful, to strengthen the Petro,” Venezuelan President Nicolas Maduro said in a televised speech on Wednesday night. On Tuesday, he announced that US $735 million was raised during the pre-sale of the Petro.
While the United States Treasury Department has warned that Venezuelan cryptocurrencies could violate sanctions and thus create legal risk for U.S. investors, several firms and investors from Brazil, Poland, Denmark, Honduras, Norway and the Middle East have said they are open to receiving Petro as payments for goods or investing in the currency.
Maduro has said the goal of the Petro, and now the Petro Gold is to combat sanctions and the “economic war,” waged by the U.S. government and its junior partners against his country, all while advancing “on issues of monetary sovereignty, to make financial transactions and overcome the financial blockade.”
The launch of the Petro was announced in December. It is regulated by the Superintendence of Cryptocurrencies and Related Activities, as well as the Blockchain Observatory.
Cryptocurrencies typically are not backed by any government or central bank, nor are they regulated. However, the U.S. Security and Exchanges Commission has been increasingly tracking digital currencies, classing some tokens as securities, thus making them subject to oversight.
On this point, Maduro said: "We have taken a giant step into the 21st Century... We are on the world’s technological vanguard.”
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