Venezuelan President Nicolas Maduro made a bold statement after meeting with Organization of Petroleum Exporting Countries (OPEC) Secretary General Mohammed Barkindo in Caracas on Monday, announcing that he plans to officially propose a common OPEC cryptocurrency backed by oil.
The Venezuelan leader announced that he “will make an official proposal to all OPEC members and non-OPEC states to work out a joint cryptocurrency mechanism backed by oil.”
Maduro’s proposal for an oil-backed cryptocurrency is quite similar to his own plans to create a national cryptocurrency called the Petro, which Maduro claims will be backed by Venezuela’s extensive oil reserves. Plans for the Petro were announced in late 2017, and the government announced earlier this week that the token pre-sale is scheduled to take place on February 20th.
Authorities have not shied away from openly declaring that the purpose of the Petro is to avoid and circumvent Western sanctions, permitting Venezuela to access foreign capital indirectly. It’s not clear exactly what the purpose of Maduro’s proposed OPEC cryptocurrency will be, but Maduro and his team are perhaps hoping that such a project could be an additional way to raise financing while staying clear of sanctions.
However, if the OPEC cryptocurrency is to have any chance of existing, Venezuela’s Petro project will have to act as a proof of concept. Venezuela plan to sell up to 100 million units of Petro between February 20th and March 19th at an initial price of $60 per Petro. The South American country have vowed to back the Petro with up to 5 billion barrels of its oil.