Venezuela's Petro Cryptocurrency To Be Auctioned On Dicom Foreign Exchange Platform

The government of Venezuela has announced that the country’s oil-backed cryptocurrency, the Petro, will be auctioned to private companies via Dicom foreign exchange platform in a few weeks.

Dicom, a venue at which the Venezuelan government auctions foreign currency, was created in May 2017 with a rate of 2,200 bolivars to one US dollar, by June it had increased the rate to 2,640 bolivars. In September 2017, the platform was temporarily shut down because it couldn’t supply enough foreign currency to meet demand. Last month, it was reported that the platform was being relaunched with a rate of 3,345 bolivars to the dollar.

Speaking at a meeting broadcast on state television, Venezuelan vice president Tareck El Aissami said that that the Petro will be auctioned, and added that companies will be able to use the cryptocurrency to buy and sell raw materials, capital goods, pay for services, as well as participate in technological development through the Petro.

“The Petro is going to be our powerful international currency, above the dollar,” said Aissami. “You can buy Petro with a discount and that discount can be registered as part of your assets…if you have dollars, euros or any exchangeable currency, we exchange it for Petro and that Petro is recognized as part of your assets and so you can raise your capital.”

The vice president also called on local banks to buy the petro at a discount during the preliminary phase, which ends on March 20.

Venezuela started the pre-sale of 82.4 million Petro units on February 20. Last week, president Nicolas Maduro claimed that $3 billion was raised in the first week, and that it received overwhelming response from as many as 127 countries.

Meanwhile, Venezuela’s Asamblea Nacional, a group of politicians largely at odds with Maduro and his policies, has reiterated that the Petro is still illegal. The group said the cryptocurrency is unconstitutional, a fraud, and a potential threat to investors.

Deputy Francisco Sucre pointed out that “oil fields are national goods and cannot be given as collateral.” He insists on declaring the public offer of the petro null and fraudulent.

Last month, the US Treasury Department stated that the Petro is a currency with characteristics that “appear to be an extension of credit to the Venezuelan government” – a measure forbidden by US sanctions – and that “US inestors that deal in the prospective Venezuelan cryptocurrency may be exposed to US sanctions risk.”

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