Venezuelan state-issued Petro digital currency has been off to an interesting start, to say the least. Having seen it banned by US President Donald Trump, it seems the oil-rich country is on the lookout for new avenues of its use – and the latest offer might be too tempting for India to say no.
According to a report by Business Standard, a team of experts from Venezuelan blockchain department has visited India last month to discuss a possible deal. The details have surfaced thanks to Indian crypto exchange Coinsecure CEO Mohit Kalra, who struck a deal with Venezuela’s experts and agreed to sell Petro in India. Petro was put on pre-sale on February 20th, raising around $3.8b as of yet. It is set to be officially launched after the presidential elections, which will take place on May 20th.
According to Mr. Kalra, “They are going to different countries and making offers. The offer that they have given to the Indian government is: you buy Petro and we will give you a 30 percent discount on oil purchases.“
In terms of oil import, India is the third largest country in the world, importing close to 5 million barrels per day. This number has tripled since the year 2000 and will likely increase further as the country continues its economic development. Venezuela was India’s 4th biggest oil importer in 2017 and while the imports have dropped to lowest levels in over half a decade due to the severe political and economic crisis in the South American country, the new deal could return them to previous heights. 30% discount on such a precious commodity must surely sound enticing for the Indian government, especially having in mind the recent surge of oil price.
For now, there is no indication from the Indian government on accepting or rejecting the deal. Given the recent discussions between both parties, the situation might change a bit further down the road, most likely after the presidential election. Venezuela claims that by 2020 Petro will be its official currency and expects a positive impact on the economy within three to six months of its launch. The controversial president Nicolas Maduro has even thanked Donald Trump, saying that the US ban has resulted in doubling the number of interest investors.
Petro has drawn a huge amount of criticism, with experts claiming it undermines legitimate cryptocurrencies and strangely even Venezuelan National Assembly declared it unconstitutional. Venezuela is currently being tormented by hyperinflation and shortage of basics, such as food or medicinal supplies, in addition to US sanctions. Many believe that Petro was designed to circumvent the sanctions as it is backed by a barrel of Venezuelan oil.
Other analysts claim that cryptocurrency, backed by oil is a safe investment as Venezuela is in possession of world’s largest oil reserves of over 300 billion barrels. However, it is issued by a government, controlled by the shady Nicolas Maduro and is not decentralized, as opposed to other virtual currencies.
Speaking to Business Standard, a source stated that, “Even if it is backed by oil, it is more of a centralized currency. Nobody knows how many coins will be launched or issued. It is not decentralized like bitcoin or ethereum.“
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I have been following the crypto markets since mid 2017, just in time to witness the incredible surge of the digital asset industry. Fascinated by the potential of blockchain technology I’ve started to dig deeper and that’s how I ended up meeting the Toshi Times team. I hold a Political Science degree, therefore the crypto regulation development is particularly interesting for me. I’m also heavily involved with music, running my own label, a YouTube channel and working with distribution. People call blockchain the ‘Fourth Industrial Revolution’ and I believe it will change our daily lives in the coming years and we will have the front row seats to witness it.