Venezuela changes Petro’s backing from 5B barrels of oil to 30M

Venezuela now intends to back its Petro currency with 30 million barrels of oil instead of the 5 billion it had initially planned.

Venezuelan oil-backed digital currency

The country’s president had initially announced that the nation’s oil inventories are ready to serve as a physical backing for Petro currency.

The president has not elucidated about how the asset would be backed. However, Reuters reported that the country had initially planned to back the asset with five billion barrels of oil. However, the nation’s plans had to take a hit when the United States placed sanctions on its state-owned company PDVSA. As a result, the country will now back the asset with 30 million barrels of oil.

Petro promotion sky high in the country

Petro was initially announced on state television by President Nicolas Maduro, who called it a “sovereign Venezuelan crypto asset.” Maduro had also stated that all retirees and pensioners would receive their Christmas bonus funds through Petro.

The asset is widely promoted in Venezuela by the country’s government. Such initiatives were taken in 2018 as well. Last time the government chose to convert pensioners’ monthly bonus into the asset and send them as such.

Petro was launched in February 2018 as the first-ever digital asset to be backed by oil barrels. The asset is designed to fight against US sanctions as well as the inflation that is becoming rampant in the country.

Before the launch, Nicolas Maduro launched 100 million coins of the asset with each coin backed by a single barrel of oil. Although the president asked the nation’s central bank to start accepting the asset, it has not complied, and the asset remains unused in the country.