Venezuela Parliament Outlaws National Cryptocurrency Calling It Unconstitutional

January 10, 2018

Venezuela Parliament Outlaws National Cryptocurrency Calling It Unconstitutional

National Assembly of Venezuela has declared the developing national cryptocurrency El Petro illegal. The idea of creating this cryptocurrency belongs to the President Nicolás Maduro, however National Assebmly is opposition-run, hence there are a lot of tension between them. 

Legislative body says that this cryptocurrency, which is according to Maduro will be backed by commodity resources of the country such as oil and diamonds, in fact will be a borrowing against Venezuela's oil reserves.

Therefore, the issuance of El Petro would violate the country's legislation since the National Assembly must approve all government borrowings and they do not have any plans to do it.

A member of the legislation body Jorge Millan stated that El Petro is 'tailor-made for corruption'. He also said that:

"This is not a cryptocurrency, this is a forward sale of Venezuelan oil."

Millan also tweeted that:

"They have announced issuance of an alleged cryptocurrency [that] is illegal and unconstitutional. A new deception of the regime ..."

Venezuela Parliament also warned all the investors that El Petro would lose all its credibility and become "invalid" once Maduro steps down from his office. Presidental elections will be held in 2018. 

El Petro was announced by Nicolás Maduro in December 2017. He declared that the goal of the cryptocurrency is to help the country to fight imposed economic sanctions which limit country's ability to transfer money. Maduro said that 5 million barrels of oil are already reserved for backing El Petro. He added that total 100 million tokens will be issued. 

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