Venezuela starts its own oil-backed cryptocurrency

Nicolas Maduro
Nicolas Maduro. Photo credit: Getty

President Nicolas Maduro says Venezuela has received US$735 million (AU$1 billion) in the first day of a pre-sale of the country's 'petro' cryptocurrency, aimed at pulling the country out of an economic tailspin.

Mr Maduro is hoping the petro will allow the ailing OPEC member to skirt US sanctions as the bolivar currency plunges to record lows and it struggles with hyperinflation and a collapsing socialist economy.

Blockchain experts have warned the petro is unlikely to attract significant investment.

Opposition leaders have said the sale constitutes an illegal debt issuance that circumvents Venezuela's majority-opposition legislature, and the US Treasury Department has warned it may violate sanctions levied last year.

Mr Maduro did not give details about the initial investors and there was no evidence presented for his figure. He added that tourism, some petrol sales and some oil transactions could be made in petro.

"Today, a cryptocurrency is being born that can take on Superman," said Mr Maduro, using the comic character to refer to the United States, as he was flanked by mining rigs in a state television address.

The official website for the petro published a guide to setting up a virtual wallet to hold the cryptocurrency. The cryptocurrency goes public next month.

Venezuelan Cryptocurrency Superintendent Carlos Vargas last week said the government was expecting to draw investment from investors in Turkey, Qatar, the United States and Europe.

The value of the entire petro issuance of 100 million tokens would be just over US$6 billion, according to details given by Mr Maduro in recent months.

The tokens will each be valued at and backed by a barrel of Venezuelan crude oil, Mr Maduro has said.