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India Squashes Petro Rumors, Will Not Accept the Digital Currency For Oil Imports

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India Squashes Petro Rumors, Will Not Accept the Digital Currency For Oil Imports

Despite the criticisms that the controversial Petro cryptocurrency has faced both locally and internationally since its launch in February 2018, the coin’s backers have unsuccessfully tried their best to gain relevance and seek a robust use-case. However, most countries have thwarted the idea of using a cryptocurrency for official deals.

India Shuns the Petro

Amongst them is India, a long-time importer of Venezuelan crude oil who officially shunned the country’s state-backed cryptocurrency on May 28, 2018, confirmed the Foreign Minister of India, Sushma Swaraj. Earlier in 2018, the Venezuelan government offered the petro as a means-of-payment for crude oil imports.

Swaraj informed at a news conference that India is not on the list of crypto-friendly nations and that it will not authorize dealing in digital currency any time soon, in support of the order mentioned above.

This disallowance comes on the back of a major collapse in the stats of average oil imports from the Latin American nation to India, since 2012. Venezuela is in a fix, as it is battling the inflexible U.S. financial permissions and is dodging them by offering the customers of the diminishing oil production, an option to pay in digital currency – the petro.

Interestingly, the coin is wholly endorsed by Venezuelan President Nicolas Maduro as being the first ever cryptocurrency that is supported by oil reserves.

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India is on the receiving end of increasingly higher bills of crude oil imports. The country also lives in fear of skyrocketing oil and fuel prices that are constantly aggravating their current accounts. This surge in prices is at a five-year-high and has slowly started to influence economic growth, negatively.   

Oil Offered at 30 Percent Discount to India

As reported by BTCManager on April 30, 2018, Venezuela, in a bid to save their oil business in India, even offered the subcontinent a 30 percent concession on crude oil orders, given that the country paid in Petros. However, India seems to be very staunch in its decision, blatantly declining this offer.

Venezuela even went to the extent of agreeing to accept the Indian Rupee for their oil trade with the country, with the aim of evading the U.S. sanctions on dollar-based trade. The South American had also chalked out how they intend to utilize the Indian Rupee, primarily using them to purchase Indian food products and medicines.

Iran and India Dump the Dollar for Oil trade

Despite the unwillingness of India to trade with Venezuela using the petro, the Asian superpower has agreed with Iran to drop the U.S. dollar in bilateral trade for oil. According to a report from May 30, India will pay for Iranian oil using rupees to circumvent U.S. sanctions on Iran. India bought 27.2 million tonnes of oil from Iran in the financial year ending April 2018.

While on the surface, it has no bearing for bitcoin or other cryptocurrencies, it does mark the first step away from the U.S. dollar hegemony and shows that adoption of bitcoin could be a further step taken in the near future.

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