Venezuela has raised $725 million in the first day of sale of its new cryptocurrency, according to president Nicolas Maduro.

Maduro unveiled the results, which have been challenged by critics, during a live national broadcast. No information has been released by Maduro regarding who invested in the pre-sale of the “petro” cryptocurrency, developed to circumnavigate US sanctions.

The petro is backed by the country’s oil reserves, which are the largest in the world. This hasn’t stopped Venezuela from sliding further into an economic mire fuelled by inflation and food shortages.

“We have taken a giant step into the 21st Century,” Maduro said in the broadcast. “We are on the world’s technological vanguard.”

The Venezuelan government said it will release 100 million petro coins during the first year, with the initial 38.4 million expected to go on sale at a value of $60 per token. It has also promised tat Venezuelans will be able to use the coins to pay taxes. The Venezuelan minimum wage is currently £3 per month.

Read more: Latin America on the edge of a new digital banking age

Bitcoin and other cryptocurrencies are already popular in the South American country, used as a hedge against hyperinflation and as a method of payment for a variety of daily necessities. Obtaining hard currency in the country often requires access to a thriving black market.

US sanctions, brought in last year by Washington, block US banks and investors from acquiring Venezuelan debt, stopping the nation from borrowing money to refinance itself.

“The Venezuelan government is looking to take advantage of one of the key features of cryptocurrencies – decentralisation. Through ICOs, cryptocurrencies have shown that start-ups have been able to circumvent traditional finance and fundraising by reaching a global audience through technology and pitching their ideas directly,” said Matthew Newton, analyst at eToro.

“If sovereignty is enhanced through cryptocurrencies, and regulators are unable to do anything about it, what more is there left to prove? Cryptocurrencies will be truly decentralised.”

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by Alex Hamilton
Alex is Senior Reporter at IBS Intelligence, follow him on Twitter or contact him at: alexanderh@ibsintelligence.com
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