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President of Venezuela Nicolas Maduro released a statement related the reserves of the Petro, the state backed cryptocurrency of Venezuela. Maduro’s government has been pushing for an increased use of Petro by the Venezuelan citizens.
On Wednesday, President Maduro said that some 30 million oil barrels in the country’s storage tanks would serve as Petro’s backing. The country’s national cryptocurrency has been sanctioned by United States, alongside many other sectors and areas of the Venezuelan economy.
As inflation has been increasing In Venezuela and making quality of life harder for the Venezuelan citizen living on minimum amount, the socialist government has resorted to push citizens to incorporate Petro in their daily lives.
In a nationally televised address, Maduro stated that he will deliver 30 million of barrels as a physical reserve, demonstrating the backing of the cryptocurrency Petro. He further added that currently the inventories of barrels of oil products in the storage tanks are ready for commercialization immediately. He claimed that the reason for that is to sustain and back the Venezuelan cryptocurrency asset, the Petro, and its operations.
Petro’s launch last year was brought with a backing of 5 billion barrels in intact crude oil reserves from a location where it had to be extracted from the ground with no available infrastructure, as the Venezuelan authorities did not reveal this little tidbit back then. To add more to the skepticism surrounding the national cryptocurrency, the Petro does not exchange on any popular digital currency exchange.
Crypto, Oil and Sanctions
The shift has been brought after crude oil inventories in Venezuela have increased within the recent months. US sanctions have been placed on PDVSA, a state oil company, as the Trump administration’s attempts to exhort Maduro have discouraged new buyers. This decision caused PDVSA to decrease the amount of crude oil mining during the recent months.
According to Kpler, an information intelligence firm, inventories for crude oil have decreased to 39 million barrels by the end of last month from when they stood at 40 million barrels at the beginning of the month.
Authorities and establishments in Venezuela have rapidly promoted the use of Petro in the recent weeks. However, there is no evidence of a significantly increased use of Petro in the commercial market, although authorities have stated that many retailers are now accepting it as a valid form of transaction.
President Maduro previously blamed sanctions placed on the country for its growing economic problems. Although he has been aggressively pushing for the promotion of the Petro, he has not provided any information about how the sale of inventories of oil barrels would actually back the cryptocurrency.