Venezuela Cuts Petro's Backing from 5B Barrels of Oil to 30M: Reuters

Venezuela plans to back its national oil-pegged cryptocurrency, the Petro, with 30 million barrels of crude oil.

Venezuelan President Nicolas Maduro announced that the oil inventories are sitting in the country's storage tanks and are ready for immediate commercialization to serve as a "Liquid, physical, material backing" for the Petro.

In the announcement, Maduro called the Petro a "Sovereign Venezuelan crypto asset."

Venezuela initially planned to back the Petro with 5 billion barrels of oil.

While Maduro has not provided any details on how the sale of oil inventories would work in order to back the Petro so far, another Reuters report said that the Venezuelan government initially planned to back the cryptocurrency with five billion barrels of oil.

According to the report, the sharp decline in the quantity of the Petro's backing was caused by United States sanctions on Venezuelan state-owned oil company PDVSA. The firm allegedly reduced crude extraction in 2019 due to said sanctions.

On Nov. 17, Maduro announced that Venezuelan retirees and pensioners will get their Christmas bonus in the Petro.

Similar initiatives have already happened before as Venezuela reportedly automatically converted pensioners' monthly bonus into the Petro in late 2018.

Prior to launching the Petro, Maduro ordered the issue of 100 million Petros with the value of a single barrel of oil each in January 2017.

Reuters has reportedly been unable to find evidence of any use of the Petro as a means of commercial exchange as of Nov. 20, despite officials promoting the coin in recent weeks.