Venezuela aims for crypto alchemy with new 'petro gold' token


Brian Ellsworth and Ana Isabel Martinez
Wednesday, February 21, 2018

CARACAS -- Venezuela is preparing a new cryptocurrency called "petro gold" that will be backed by precious metals, President Nicolas Maduro said on Wednesday, a day after launching an oil-backed token that has been panned as a pipe dream by blockchain experts.

Maduro is hoping cryptocurrencies will help Venezuela skirt U.S. financial sanctions as it struggles under hyperinflation and a collapsing socialist economy.

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On Tuesday he said the newly launched petro cryptocurrency raised $735 million in the first day of a pre-sale.

Opposition leaders call the state-backed cryptocurrency an illegal debt issue, and investors have questioned its value given concerns about Venezuela's solvency and transparency.

"Next week I'm going to launch the petro gold, backed by gold, which is even more powerful, that will strengthen the petro," Maduro said in a televised speech.

It was not immediately evident if he was referring to gold reserves in the central bank or to undeveloped mineral deposits. ...

Sean Walsh, founder of crypto-asset investment firm Redwood City Ventures, said it was difficult to reach conclusions about the petro gold without seeing specific details. But he said he had little interest in tokens backed by physical assets.

"Rather than buying a cryptocurrency backed by gold, I'd just go buy the gold," said Walsh in a telephone interview. "Gold is a physical thing that you want to be able to hold in your hands, because that's the point."

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