According to Nicolas Maduro, the Petro is needed to overcome the financial blockade of the country. The Ministry of Finance of Venezuela clarified that the cryptocurrency is necessary to carry out financial transactions and to seek new ways of financing.
Venezuela's Cryptocurrency, the Petro, to Be Backed by Oil Reserves - Maduro
https://sputniknews.com/latam/201712061059745806-venezuela-cryptocurrency-oil-reserves/
Venezuelan President Nicolas Maduro promised on Tuesday to certify the new Petro cryptocurrency in the near future, which will be backed by the country's oil reserves.
"In the near future, I will sign the Petro certificates, which will have the support of thousands of oil barrels from Orinoco Belt," Maduro said in a televised statement, adding that national gold and diamond reserves will also support the digital currency.
On Sunday, Maduro announced the introduction of a digital crypto-currency, the Petro, which is expected to help the country overcome its financial blockade. The Venezuelan Ministry of Finance specified that the cryptocurrency was necessary to make financial transactions and look for new ways of financing.
In November, the United States imposed new sanctions on 10 current and former Venezuelan officials for their role in undermining the country's electoral process, censorship and corruption. The list of individuals includes newly-appointed Culture Minister Ernesto Emilio Villegas Poljak and Minister of the Office of the Presidency Jorge Elieser Marquez Monsalve, as well as Freddy Alirio Bernal Rosales, an agriculture minister in charge of the government-run food distribution program.
This end-run around sanctions will improve the lives of millions, and represents a major counter-attack against globalist bankers' hegemony. This cryptocurrency can't be 'mined', and isn't subject to manipulated inflation.
Russia, Venezuela launch Cryptocurrency counter-attack on Globalist Bankers
http://www.fort-russ.com/2017/12/russia-venezuela-launch-cryptocurrency.html
Venezuela and Russia, only two months apart, have announced the creation of national digital currencies to speed up their international trade. In the case of Russia the currency will have the name of Cryptorubl , can not be mined and its exchange rate will be determined by the Central Bank of Russia.
A Bloomberg article written by Leonid Bershidsky about the announcement by President Nicolás Maduro stresses with anger that a Venezuelan cryptocurrency could bypass US financial sanctions, with the possibility of issuing debt and offering a degree of anonymity in its centralized Blockchain system, protecting the creditors to be sanctioned and achieve the necessary access to foreign currency.
Cryptocurrencies can be used as tools for sanctioned countries, since they are not subject to control or intermediation by US and European financial institutions.
President Nicolás Maduro announced the creation of a Venezuelan cryptocurrency (El Petro), backed by the country's oil, gas, gold and diamond reserves, and a Venezuelan Blockchain Observatory to give this digital currency legal and institutional basis. What is this financial initiative that is gaining more space in the world of finance?
Let's start with the principle: what is a cryptocurrency? - A cryptocurrency or digital currency is basically a means of electronic exchange. Contrary to the currencies issued by the Central Banks of the world (dollars, euros, etc.), the particularity of cryptocurrencies is that their "production" depends on quotas of natural or legal persons not subject to regulation or intermediation of financial institutions global (led by the USA) and state.
This production process is known as "mining" , in which networks of people or groups (called miners), equipped with high-power processors compete on the internet to obtain the reward (bitcoin or other cryptocurrency), by solving mathematical problems complexes testing random numbers with high speed.
As if it were a casino, whoever manages to find the answer first receives the cryptocurrency and distributes it among the winning miners.
Since its popularization in 2009 with the famous Bitcoin system, the global use of cryptocurrencies and especially their price have increased exponentially, expressing not only the high demand for their acquisition but also the facilities, low transaction costs and the security that offer, since they can be monitored by those who make up the network and are not subject to international banking intermediation.
The growth has been such that global banks such as Goldman Sachs and Black Rock already offer management services for hedge funds that are aggressively investing in cryptocurrencies.
Although initially designed as a means of digital payment, cryptocurrencies have progressively migrated into reserve currency, safekeeping of financial assets or simply an investment instrument. The value of a cryptocurrency depends on its demand and has as a reference the currencies with the greatest global influence such as the euro, the dollar and the yuan.
And the Blockchain? - According to the famous portal Investopedia , Blockchain (chains or payment blocks in Spanish) is a digital book that in a decentralized and public way accounts for all cryptocurrency transactions, each node (server connected to this network) is allowed to download a copy of each transaction. This system operates outside the classical institutions of the international financial system.
It is basically an accounting system that generates a permanent record as a block, guaranteeing, according to the opinion of its pioneers, a reliable, secure mechanism that is not regulated by a central authority to verify transactions made in cryptocurrencies.
"Concerns" of the big US banks and the false debate about cryptocurrencies - The growth of cryptocurrencies - bitcoin exceeded the barrier of 11 thousand dollars per unit a few hours ago - has begun to generate concern among the masters of the world economy, that select club formed by multilateral financial institutions, large central banks and private banks. of great weight.
To the warning of the Bank of International Settlements (BIS) about the harmful role of bitcoin, the financial institution that controls almost all transactions worldwide and has been linked to the powerful Rothschild family, the US Federal Reserve was alerted "the danger" that the use of cryptocurrencies represented for the international financial system. Other large banks such as JP Morgan or UBS have shown their open rejection of investment in digital currencies.
The concerns of these financial actors are based on the fact that the system of cryptocurrency transactions favors anonymity and, therefore, criminal operations related to drug trafficking and the illegal arms trade. The large private US banks have served as a washing machine for global drug trafficking and for paramilitary groups such as the Islamic State or the Los Zetas Cartel, so these "concerns" reflect rather the open competition that exists with rising cryptocurrencies.
The debate surrounding the use of bitcoin in criminal operations is totally fallacious, since the problem is not the means they use for financing but the existence of these organizations themselves, historically supported by the US and NATO.
On the value and support of the digital currency it is also important to specify that the dollar has no other support than the "confidence" (a psychological factor, not material) since the Nixon administration broke the dollar / gold convertibility.
Cryptocurrencies in Venezuela - A product of the distortions created by daily dollar rate in the Venezuelan exchange market, cryptocurrency mining activities have been growing. An organization involved in this business, Dash Caracas, indicated that in September there were transactions in cryptocurrencies in the order of 40,000 million bolivars.
Given the low costs of electricity in Venezuela and the daily increase of the dollar in the parallel market, mining has become profitable and attractive as a mechanism for saving and access to foreign currency. A report recently published by the BBC on the subject, said that "the miners in Venezuela are generally young entrepreneurs, mostly male, familiar with the world of technology and middle class or affluent members."
Although the expenditure on electricity is low, the investment in equipment necessary for mining is imported and large in dollars. The report affirms that "the miners are responsible for the aggravation of the electric service", due to the high electrical consumption that this activity requires.
The Venezuelan Observatory of Blockchain and "El Petro" itself could be outlined as a mechanism to regulate and intervene in this activity in Venezuela, even publicly Surbitcoin (leader in price references and cryptocurrency transactions) has said that its main banking partner is Banesco However, in a context of increasingly accelerated financial globalization, where nation-states are losing their internal control capacity, the regulation of crypto-mining in its entirety is highly complicated (not only for Venezuela).
The case of China, a state that could not be considered weak, is illustrative: in the Asian giant , 80% of the world's bitcoins are traded .
Venezuela and Russia to cryptocurrencies: a geopolitical maneuver against US sanctions? - Contrary to the prevailing catechism on cryptocurrencies, Venezuela and Russia, only two months apart, have announced the creation of national digital currencies to speed up their international trade. In the case of Russia the currency will have the name of cryptorubl , can not be mined and its exchange rate will be determined by the Central Bank of Russia.
At no time does this decision lead to the legalization of the bitcoin market in Russia, so the initial approach is to take advantage of its advantages in a controlled manner. Something similar could be planned by the Venezuelan State.
Venezuela and Russia share the status of countries sanctioned by the US, instruments that in their application have limited both partner countries access to the financial market and the use of the financial system linked to the dollar for part transactions and investment projects.
The US is considering the possibility, according to Bloomberg, of applying sanctions against the Russian debt (in the style applied against Venezuela) , so the Putin government finds in the creation of a national cryptocurrency an immediate response to protect its debt and its financial connectivity in the world.
2017 has been a key year in the transition to an emerging financial system distanced from the dollar, where Russia and China have taken a leading role in the construction of a payment architecture, investment and commercial exchange at the regional level in their own national currencies, novel factors that they do not necessarily rival the cryptocurrency.
Within the framework of this offensive, as far as Latin America is concerned, Venezuela has a vanguard role in that geo-economic projection that challenges the spinal cord of US political power globally: the dependence on the dollar.
Among the reasons that Russia alludes to launch its own national cryptocurrency is that its main geo-economic pivot, the Eurasian Economic Community , one of the most dynamic commercial poles in the emerging multipolar world, is to include this format of payments for its commercial exchanges.
Russia undoubtedly sees the benefits - in a cautious way and on the march of the geopolitical events - of using a payment system that does not depend on the dollar (beyond being used as a reference) and that allows us to avoid the imposed tax surcharges for the sanctions.
For its part, Venezuela suffers a voracious financial, economic and oil blockade that, beyond limiting its access to the debt markets, has gone so far as to block its most elementary transactions for the payment of external debt and for the importation of medicines and food. at a time when the population requires it most.
The possibility opens with the use of cryptocurrency that Venezuela and Russia speed up their levels of cooperation and financing, finding a common route to increase financing in the energy field, a critical area for the country's economic sustainability in the medium term.
President Maduro's announcement should not be viewed in isolation, but as part of a financial strategy that seeks alternative mechanisms to bypass the limitations of US banking to make payments and import vital inputs for the life of the population. The cryptocurrency offers an alternative for this situation, since it could function as a financing mechanism in foreign currencies and payment outside the US bank.
As part of that strategy, PDVSA began to quote Venezuelan crude in yuan a few months ago and ordered that payments and imports be progressively migrated to European and Asian banks, in order to avoid the US financial blockade. The Venezuelan cryptocurrency, according to the words of Maduro, would be a new vertex in the framework of this transition outside the dollar.
It is a political measure. Some conclusions in process:
The amount of cryptocurrency to be issued will depend on the government needs at the time, its conditions and determine in what quantities of ounces of gold, barrels of oil, BTU of gas or carats of diamonds to determine its value, as well as its insertion in the map of cryptocurrency payments worldwide. Also, once placed in operation, it will be related to the parallel dollar market based on the value of "El Petro", and whether it could have an impact on the bottom line that drives inflation in Venezuela every day for political reasons.
The treatment of cryptocurrencies should not be based on a moral analysis. Are they good or bad? It depends on its use and effectiveness according to the strategy. Does it make us vulnerable to vulture funds and financial speculators? That exposure occurs with all currencies, it is not something particular of cryptocurrencies. Vulture funds act against Venezuela without ever having used that mechanism. Can they be used for illegal businesses? The dollar and the US bank have been used as a mechanism for money laundering by terrorist groups and drug traffickers, but the fear is rising cryptocurrencies.
The issue of cryptocurrencies in Venezuela will give much to talk about and if something was clear in 2017 is that trust in Maduro is key to winning the battles that we have left, and that there are many.
