Venezuela to Sell Oil Production in Petro in Move to Oust Dominance of Dollar

In a bid to bypass the US-imposed sanctions, Venezuela will be selling its oil production in the Petro cryptocurrency. The Venezuelan President Nicolas Maduro said from the coming new year his country would have a timetable to sell all its oil production in the state-owned cryptocurrency. “This way, Venezuela will free itself from the currency used by Washington ‘to create economic pain’ to other countries and to persecute countries as it does with Venezuela, Cuba, Iran, and Russia.” The announcement came after Maduro had a meeting with the Russian President Vladimir Putin earlier this week.

The President said the cryptocurrency would be used as an exchange currency and nothing more. CNN highlighted Maduro as saying “It is necessary to promote a balanced, fair and diverse monetary system in which the dollar enters as an exchange currency, but which is not used as a political mechanism.” According to Coin Desk, the Venezuelan President has a six-year financial plan to use the token. In November, Venezuela’s Minister of Petroleum Manuel Quevedo had announced that Venezuela would present the Petro to the Organization of the Petroleum Exporting Countries (OPEC).

Earlier this year, Maduro had described Petro as the world’s first to be backed by a country’s physical assets. The DW highlighted him saying “I have ordered the release of 100 million Petro with the legal sustenance of Venezuela’s certified and legalized oil wealth.” He promised that each unit of the currency would be linked to the country’s oil basket. According to the oil ministry, Venezuelan oil averages $59.07 per barrel and this, in turn, suggests that the total cryptocurrency issued would be worth over $5.9 billion.

But experts have waved off the Petro as an odd scheme. They have said that the region lacks in oil production and there was no visible effort in developing it either. As per a Reuters Special Report, “the only evidence of an oil presence were old rigs that have clearly been inoperable for a long time, as they are rusted and covered in weeds.” Speaking on anonymity, a Venezuela cabinet minister had told Reuters that nobody has been able to make use of the Petro, nor have any resources been received, and the technology for the digital token is still under development.”

Petro needs time to take off and settle into the market like a traditional currency. And more countries will come up with similar techniques to maneuver US sanctions and most importantly to topple the US dollar aside.