Venezuela Expects ‘Petro’ to Draw Overseas Investments

Venezuela’s new ‘petro’ cryptocurrency will attract investments from Turkey, Qatar, the United States and Europe, the country’s cryptocurrency regulator said on Friday.

The government of President Nicolas Maduro, which says the petro will help skirt financial sanctions by Washington, has scheduled the first petro sale for Tuesday, CNBC reported.

Skeptics say that concerns about Venezuela’s financial solvency will likely limit investor interest, while the US Treasury Department has warned the petro may violate sanctions against the OPEC nation.

“On Tuesday, there will be quite a few announcements about the start of the process,” Venezuelan Cryptocurrency Superintendent Carlos Vargas said on the sidelines of a political meeting in Caracas.

“And there will surely be a lot of investors from Qatar, Turkey, and other parts of the Middle East, though Europeans and Americans will also participate.” He did not elaborate.

The Venezuelan government has not provided full details about the petro. But advisers working for the government recommended that 38.4% of the petros should be sold in a private auction at a discount of 60%.

Venezuela is suffering quadruple-digit inflation and chronic shortages of food and medicine, which have spurred increased incidents of malnutrition and preventable diseases.

Maduro says his government is the victim of an “economic war” led by opposition politicians with the help of the government of US President Donald Trump.

Sanctions levied last year by Washington block US banks and investors from acquiring newly issued Venezuelan debt, effectively preventing the struggling nation from borrowing abroad to bring in new hard currency or refinance existing debt.

As authoritarianism continues to tighten its grip on the oil-rich nation, large numbers of its citizens are fleeing, citing the economic crisis and rampant crime as reasons for departure. In the last six months of 2017, 210,000 Venezuelans came to Colombia, according to officials in Colombia, and the numbers are growing in other countries. At least 500,000 people have fled Venezuela this year. That’s the lowest estimate around. Colombia says that over a million of them are living there now.  Venezuelans have been trickling out of the country for at least 10 years.

Venezuela is steeped in economic and political turmoil. Inflation last year surpassed 2,600%, according to opposition lawmakers, which has exacerbated severe shortages of food and medicine.