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Petro Is Now Venezuela's National Currency

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Venezuela's president Nicolas Maduro announced the launch of Petro as the national currency, seven months after his government adopted it as the country's crypto currency.

The government also issued a new white paper on Petro, describing the basic concepts of the technology behind it.

It says Petro is no longer backed fully by a barrel of oil. Instead, it is now backed by 50 percent oil, 20 percent gold, 20 percent iron, and 10 percent diamond.

"Venezuela makes history! Today we take a step forward with the launch of petro as a national currency and platform for strengthening our financial sovereignty," the state run Telesur TV quoted Maduro as saying in a televised address.

Maduro claimed that Petro is already available in the world's six topmost international exchange houses and will now be accepted at a national level. But as of now, there is no international mechanism to exchange petros for any other national currency.

In a currency reform introduced in August, the Maduro government replaced the old bolivar fuerte currency with the bolívar soberano, or sovereign bolivars. The highly devalued new currency has a fixed exchange rate to the petro. Each unit of the cryptocurrency will be equivalent to 3,600 bolívar soberanos.

Venezuelan state news agency AVN reported that the 1:3600 ratio "will be the reference for fixing the value of work, the price of services, and of consumer goods — one of the accounting units that will govern the Bolivarian nation".

Although the socialist leader says, "Petro coins are now a legal substitute to dollars in real estate deals as well as paying for goods such as airline tickets, hotels and the like," he didn't explain which firms will accept it, and how is its monetary value calculated.

Maduro tweeted that from November 5, "Venezuelans will buy Petros for Bolivar Soberano. They will buy real property, flight tickets, goods, services and save money in our gold, iron, diamond, aluminum and oil-backed cryptocurrency."

Maduro had launched the pre-sale of Petro in February to ease the country's economic crisis, and circumvent U.S.-led sanctions. He allocated five billion barrels of oil to back Petro.

Venezuela has the world's largest proven oil reserves.

But the reforms have not reportedly helped Venezuela's economy recover from the pressure of the sanctions, falling oil revenue, and the plunging value of its currency, the bolivar.

In March, the US Government had banned Americans from purchasing or dealing with any cryptocurrency issued by Venezuela, and imposed a fresh round of sanctions targeting Venezuelan government associates.

The Opposition-controlled Venezuelan National Assembly has declared Petro as illegitimate.

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