India can gain a 30 percent discount on crude oil purchases from Venezuela only if the payments are made using the state-endorsed digital currency, the Petro, which is backed by the country’s oil and mineral reserves.
Coinsecure Thinking of Listing the Petro
The Petro is a cryptocurrency which was developed by the government of Venezuela and was launched sometime in February 2018, the same month it also had its pre-sale which according to reports was able to raise over $3.8 billion and attracted investor from over 127 countries around the world.
The South American country sits on over 300 billion barrels of reserves, the largest in the world.
The Petro cryptocurrency would be made available in India by the Delhi-based Coinsecure cryptocurrency trading exchange, according to its CEO Mohit Kalra. During March 2018, a team of blockchain experts from Venezuela visited India to discuss and have Coinsecure exchange list the Petro on their platform.
Kalra confirmed acknowledged the plan, stating that Coinsecure would list the Petro cryptocurrency and will be tradeable against bitcoin and the Indian Rupee.
In a bid to further promote the cryptocurrency, Venezuela is to host a conference in India where it’s president would be introducing the cryptocurrency to a much wider audience. The Petro will officially be launched after Venezuela’s political elections are over which is to take place on May 20.
Despite the plans to make Petro the official currency for Venezuelans by the year 2020, Donald Trump, the United States president had banned the cryptocurrency and forbidden its citizens from purchasing Petro.
A Win-Win Situation for Both Nations?
Also, there have been reports by some investors consider the oil-backed Petro to be centralized.
“Even if oil backs it, it is more of centralized currency. Nobody knows how many coins will be launched or issued. It is not decentralized like Bitcoin or Ethereum,” an anonymous source told Business Standard.
Moreover, Venezuelan national and crypto enthusiast @codiox reckons the Petro is akin to a scammy ICO:
@Apompliano, Petro is a scam. It's not going to positively impact Cryptos or Blockchain tech. Au contraire, it's putting crypto in the spotlight as a way for corrupt governments to fund themselves. Think Initial Country Offering. @alegw
— E⚡G (@Codiox) April 16, 2018
A senior official with Venezuelan government in a report revealed the government has a set of rules governing cryptocurrencies.
“Like any cryptocurrency, Petro is managed through digital free software using blockchain technology. All transactions will be carried out by buyers without intermediaries,” the official said.
The idea of using cryptocurrencies will not only be beneficial to India, but we will also see a rise in the value of Petro cryptocurrency in the country. Although, it is uncertain if Venezuela is offering other nations the same deal. For now, there has been no official statement from the Indian government on the matter. India and the United States share an economic relationship, therefore it is not known if the Indian government would move forward with the decision.
According to a Reuters report, Iran replaced Venezuela to become the third largest oil supplier to India. It seems the South American country wants to regain its position as the major oil supplier to India. If the deal of using Petro goes through, both nations could benefit well.
Should India accept to pay in Petro? Share your views in the comments section.