Venezuela’s Minister of Foreign Trade and International Investment José Vielma Mora announced on Thursday, Feb. 8, that foreign investors will be accepting payments for their goods in petro, says Latin American government-sponsored news outlet TeleSur.

The petro, an oil-backed state cryptocurrency set to be released in both a pre-sale and an Initial Coin Offering (ICO), was first announced by Venezuelan President Nicolas Maduro in December 2017. The petro’s white paper released Jan. 30 explains that the idea for the petro came from Hugo Chavez, who had envisioned a “strong currency backed by raw materials.”

Mora said that Brazilian businesspeople are prepared to invest $300 mln in Venezuela, beginning with a $100 mln inversion investment.

The minister also listed Poland, Denmark, Honduras, Norway, and Vietnam as foreign countries that would be willing to receive petro in exchange for food and medicine, citing a total amount of $435 mln. According to Mora, Canada has also expressed interest in investing in Venezuela in the sphere of “pharmaceutics for humans and animals.”

The petro is an ERC20 token that has been pre-mined on the Ethereum Blockchain, with each petro is backed by one barrel of oil. Maduro had ordered the issuance of 100 mln in petro on Jan. 14 in preparation for the pre-sale.

The creation of the petro has been viewed skeptically by critics and members of the Venezuelan opposition parliament who consider the petro a fraudulent currency that could help Maduro avoid sanctions.

The petro’s pre-sale will take place from Feb. 20 at -04:00 UTC to Mar. 19 at -04:00 UTC, and there will be 38.4 mln tokens available. Pre-sale tokens “may be exchanged for petro [coins] at any time between the launch date and the closing of the initial offer,” according to the white paper.

The ICO will take place a day after the end of the pre-sale, Mar. 20 at -04:00 GMT, with 44 mln petro available for sale at a reference selling point of $60 – the price of a barrel of oil in Venezuela in the second week of Jan. 2018. The price is subject to market fluctuations, according to the white paper.

The white paper writes that the Venezuelan government will accept petro as payment for national taxes, fees, and public services, and it will be regulated by the Cryptocurrency Superintendency and the National Blockchain Observatory.

Source: Coin Telegraph

Bitcoin, the crypto currency that hit the news for its promise of easy money, touched shocking highs and lows in a short span of past few months. Yet it spawned a worldwide craze among speculators as well as common investors.

Though there is still no consensus among governments and central bankers on the status of crypto currencies, Finance Minister Arun Jaitley clarified in his Budget speech that crypto currencies were illegal and the government would not recognise them.

However, there’s more to the issue than Jaitley’s clarification.

The government is making an elaborate policy to nip crypto currencies in the bud, that is before they are in a position to facilitate the black economy or harm gullible investors.

A group under the chairmanship of Subhash Chandra Garg, secretary, department of economic affairs is in the last stages of deliberation, and is expected to come out with the government’s approach on the entire spectrum of issues related to crypto currencies.

To begin with, the government does not consider crypto currencies as currencies but as crypto assets. “We don’t like the word currency. Nobody has the authority to issue currency or coins. So, these are misnomers, wrong expressions. We prepared to treat them as crypto assets. Once we recognise that these are assets and not allowed as currency or coins, then if it is used in making payments of illegal activities, is our next line of worry. We will do everything to see that the use of crypto assets into these kind of activities are eliminated. And then you go on to identify what else should be eliminated, regulated or controlled,” Garg said in an interview to MoneyControl.

He said people should not fall prey to crypto assets without understanding them, and it was the government’s duty to see to that.

There is a lot of uncertainty and lack of clarity on the legal status of Bitcoins and other cryptocurrencies in India. “Can they be used legally for paying for goods and services? Can these be considered as currencies at all? Or are these to be treated as a commodity? Are these an investment asset? Can these be treated as movable property? What is the origin of these currencies (or property or commodity)? Does it depend on the location of the servers or the computer mining it or the person(s) involved in mining it? Can they be considered to be held in India or abroad depending on the location of the wallet?” said Dr. Vikas V. Gupta, CEO & Chief Investment Strategist, OmniScience Capital.

After Jaitley’s Budget announcement on crypto currencies, what is certain is that the government will not let Bitcoin and other crypto currencies lure gullible investors or become a means of illegal deals.

Source: Bitcoin Isle