Venezuelan Cryptocurrency Petro Gets An Illegal Status From the Country’s Lawmakers

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by Bhushan Akolkar · 3 min read
Venezuelan Cryptocurrency Petro Gets An Illegal Status From the Country’s Lawmakers
Photo: Alejandro Alarcon / Flickr

The lawmaking bodies have denounced the creation of Petro calling it absolutely unconstitutional, a fraud and a potential threat to investors.

Due to increasing sanctions imposed by the U.S, the President of Venezuela – Nicolas Maduro has been working out ways in order to circumvent the financial blockade. While looking at the unprecedented growth in the popularity of cryptocurrencies, the President took this route of having a state-owned cryptocurrency called Petro which is backed by the country’s own oil reserves and other commodities like gold, gas, and diamond. The major aim behind Petro is to make the country’s economy free from U.S influence and prevent it from going into the state of turmoil.

Ever since the announcement was made in December 2017, President Maduro has also been in talks with other OPEC nations who have been affected by the U.S sanctions, to come and adopt Petro. Last month in Feb. 2018, President Maduro also made a big-bang announcement in front of the media stating that in the pre-sale round of the Petro tokens, the government has managed to raise a whopping $750 million. However, the President provided little evidence at that time to back his claims.

Although President Maduro has been seen making big claims about Petro, the cryptocurrency has received a huge friction from the country’s own people and especially the opposition party Congress. Now, its the law-making bodies of Venezuela who have ruled out the issuance of Petro, saying that it is absolutely illegal under the country’s domestic laws.

The announcement came on Tuesday, March 6,  when Venezuela’s Asamblea Nacional – a group of politicians opposing Maduro’s policies said that they believe Petro to be unconstitutional in nature. This group completely denounced the project not only calling it unconstitutional and a fraud, but also a potential threat to investors.

In a public statement, the opposing group members also heavily criticized the $750 million sales saying that it is just a symptom of the country’s ongoing political crisis. There has also been a heavy criticism of the government’s proposal which says that businesses and retirement accounts will need to accept payments in cryptocurrency Petro if issued.

The lawmakers have completely denounced such proposals from the government with a harsh criticism. The lawmaking body said that the Petro is designed to formulate yet another corrupt way by the government of embezzling funds from citizens. In the recent years, Venezuela has been suffering from a severe economic crisis with a high rate of inflation and unemployment prevailing for a long time.

The New York Times had recently reported that in this critical ties, President Maduro has formed a competing legislature dubbed the National Constituent Assembly (ANC). The legislature has supported the launch of Petro calling it as the “act of rebellion” in order to circumvent the western sanctions.

Rafael Guzman, who chairs the body’s economic and finance commission, during the release of the Petro said: “This deepens the crisis that we are living in. The PTR is another [example] of corruption, and we will come out of this crisis with measures that we have announced from this Parliament.”

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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