Topic: Update: Venezuelan state issued crypto to be backed by oil, gas, gold & diamond - page 2. (Read 222 times)
February 20, 2018, 09:09:39 AM
I'm sure this petro will collapse for the same reasons as Venezuelan bolívar has collapsed. This dictatorship government is full of lies, they don't care about their people only robbing them more and more. "Backed by oil", really? What does it even mean apart from attempting to fool potential investors? Petro is backed by nothing except the words of Nicolas Maduro who is a known liar and would lose the elections in April if only they were fair ones and right then this coin would become absolutely worthless. But even if Maduro will not lose the elections I think the price of this coin will be around 1 Satoshi as of any other sh*tcoins with time.
February 20, 2018, 08:29:42 AM
February 20, 2018, 08:19:46 AM
Oil is traded on world markets only for dollars.
It is true that before 2017 things were 100% that way for a long time.
In 2017 however china (being the largest importer of oil in the world) announced plans for oil transactions to be denominated in the yuan (china's native currency):
Quote
China has grand ambitions to dethrone the dollar. It may make a powerful move this year
China is looking to make a major move against the dollar's global dominance, and it may come as early as this year.
The new strategy is to enlist the energy markets' help: Beijing may introduce a new way to price oil in coming months — but unlike the contracts based on the U.S. dollar that currently dominate global markets, this benchmark would use China's own currency. If there's widespread adoption, as the Chinese hope, then that will mark a step toward challenging the greenback's status as the world's most powerful currency.
China is the world's top oil importer, and so Beijing sees it as only logical that its own currency should price the global economy's most important commodity. But beyond that, moving away from the dollar is a strategic priority for countries like China and Russia. Both aim to ultimately reduce their dependency on the greenback, limiting their exposure to U.S. currency risk and the politics of American sanctions regimes.
The plan is to price oil in yuan using a gold-backed futures contract in Shanghai, but the road will be long and arduous.
"Game changer it is not — at least not yet," said Gal Luft, co-director of the Institute for the Analysis of Global Security, a Washington based think tank focused on energy security. "But it is another indicator of the beginning of the glacial, and I emphasize the word glacial, decline of the dollar."
Beijing faces skeptical global oil markets and global perceptions it exerts too much state control. Those factors will hinder its drive to build a viable oil pricing benchmark that's able to compete with more established benchmarks like West Texas Intermediate or Brent (both dollar-denominated).
The architects of the "petro-yuan" face an uphill struggle in dislodging the "petrodollar" and, with it, more than four decades of U.S. dollar-priced oil. Attracting interest from entrenched and active markets in Europe, the U.S. and the Middle East — used to price more than two-thirds of the world's oil worth trillions of dollars – poses another major challenge.
"Many, many futures contracts are launched because they make some sense from a logical market point of view and they get a lot of attention. But then they die because the key is liquidity," said Jeff Brown, president at FGE, an international energy consultant.
There are really only a handful of truly global oil contracts from which all else is based, Brown explained, adding: "It will be extraordinarily difficult to change that."
Level playing field?
Another obstacle standing in the path of China's ambitions to price oil in yuan is the currency itself. The yuan is not yet fully convertible, it's fixed daily, prone to intervention and subject to capital controls.
Given that regime of tight control over the currency, many global players are likely to assume a yuan-denominated oil benchmark would be firmly under Beijing's thumb.
"My biggest reservations are the role of the Chinese central government, potential state intervention and favoritism toward Chinese companies," said John Driscoll, director of JTD Energy Services in Singapore and a former oil trader whose career spans nearly 40 years.
"Will the contract create a level playing field? The biggest challenge in global oil markets may be ensuring that no country or entity garners a dominant advantage," Driscoll added. "China may be world's fastest growing and most formidable energy consumer, but its central government plays a dominant role in the energy sector."
Beijing is likely to lean heavily on state-owned oil companies to adopt the yuan-based contract in an effort to drum up activity and generate sufficient liquidity — the lifeblood of any financial instrument. But despite the scale they bring, involving such state-backed players risks discouraging participants outside China.
Final stage
The main hope for the survival of a yuan-based oil futures contract, according to FGE's Brown, is that the government pushes the Chinese national oil companies onto the exchange.
Still, he added, "Most counterparties will not want anything to do with this contract as it adds in a layer of cost and risk. They also don't like contracts with only a few dominant buyers or sellers and a government role."
Beijing is plowing ahead regardless, and state-run media reported in September the plan was "moving swiftly."
Yuan pricing and clearing of crude oil futures is the "beginning" of a broader strategic push "to support yuan pricing and clearing in commodities futures trading," Pan Gongsheng, director of the State Administration of Foreign Exchange, said last month.
To support the new benchmark, China has opened more than 6,000 trading accounts for the crude futures contract, Reuters reported in July.
'Well-advanced'
The market's response to the yuan-priced oil benchmark is likely to be lukewarm at first, "but could grow over time, especially if it sparks other commodity hedging tools," said Rachel Ziemba, managing director of emerging markets at Roubini Global Economics.
China is likely to approach its main crude oil suppliers in the Middle East, Russia and Asia — some of who already accept the yuan as payment — to price their cargoes off a Chinese benchmark.
"The U.S. coverage is dropping off," said Juerg Kiener, managing director and chief investment officer of asset manager Swiss Asia Capital. "Iraq, Russia and Indonesia have all joined in non-dollar trades."
The petro-yuan is "well-advanced" and already "structurally in place," Kiener added: "As China is an importer it will push harder to get yuan contracts."
https://www.cnbc.com/2017/10/24/petro-yuan-china-wants-to-dethrone-dollar-rmb-denominated-oil-contracts.html
- China is looking to make a major move against the dollar's global dominance, and it may come as early as this year
The plan is to price oil in yuan using a gold-backed futures contract in Shanghai, but the road will be long and arduous
China is looking to make a major move against the dollar's global dominance, and it may come as early as this year.
The new strategy is to enlist the energy markets' help: Beijing may introduce a new way to price oil in coming months — but unlike the contracts based on the U.S. dollar that currently dominate global markets, this benchmark would use China's own currency. If there's widespread adoption, as the Chinese hope, then that will mark a step toward challenging the greenback's status as the world's most powerful currency.
China is the world's top oil importer, and so Beijing sees it as only logical that its own currency should price the global economy's most important commodity. But beyond that, moving away from the dollar is a strategic priority for countries like China and Russia. Both aim to ultimately reduce their dependency on the greenback, limiting their exposure to U.S. currency risk and the politics of American sanctions regimes.
The plan is to price oil in yuan using a gold-backed futures contract in Shanghai, but the road will be long and arduous.
"Game changer it is not — at least not yet," said Gal Luft, co-director of the Institute for the Analysis of Global Security, a Washington based think tank focused on energy security. "But it is another indicator of the beginning of the glacial, and I emphasize the word glacial, decline of the dollar."
Beijing faces skeptical global oil markets and global perceptions it exerts too much state control. Those factors will hinder its drive to build a viable oil pricing benchmark that's able to compete with more established benchmarks like West Texas Intermediate or Brent (both dollar-denominated).
The architects of the "petro-yuan" face an uphill struggle in dislodging the "petrodollar" and, with it, more than four decades of U.S. dollar-priced oil. Attracting interest from entrenched and active markets in Europe, the U.S. and the Middle East — used to price more than two-thirds of the world's oil worth trillions of dollars – poses another major challenge.
"Many, many futures contracts are launched because they make some sense from a logical market point of view and they get a lot of attention. But then they die because the key is liquidity," said Jeff Brown, president at FGE, an international energy consultant.
There are really only a handful of truly global oil contracts from which all else is based, Brown explained, adding: "It will be extraordinarily difficult to change that."
Level playing field?
Another obstacle standing in the path of China's ambitions to price oil in yuan is the currency itself. The yuan is not yet fully convertible, it's fixed daily, prone to intervention and subject to capital controls.
Given that regime of tight control over the currency, many global players are likely to assume a yuan-denominated oil benchmark would be firmly under Beijing's thumb.
"My biggest reservations are the role of the Chinese central government, potential state intervention and favoritism toward Chinese companies," said John Driscoll, director of JTD Energy Services in Singapore and a former oil trader whose career spans nearly 40 years.
"Will the contract create a level playing field? The biggest challenge in global oil markets may be ensuring that no country or entity garners a dominant advantage," Driscoll added. "China may be world's fastest growing and most formidable energy consumer, but its central government plays a dominant role in the energy sector."
Beijing is likely to lean heavily on state-owned oil companies to adopt the yuan-based contract in an effort to drum up activity and generate sufficient liquidity — the lifeblood of any financial instrument. But despite the scale they bring, involving such state-backed players risks discouraging participants outside China.
Final stage
The main hope for the survival of a yuan-based oil futures contract, according to FGE's Brown, is that the government pushes the Chinese national oil companies onto the exchange.
Still, he added, "Most counterparties will not want anything to do with this contract as it adds in a layer of cost and risk. They also don't like contracts with only a few dominant buyers or sellers and a government role."
Beijing is plowing ahead regardless, and state-run media reported in September the plan was "moving swiftly."
Yuan pricing and clearing of crude oil futures is the "beginning" of a broader strategic push "to support yuan pricing and clearing in commodities futures trading," Pan Gongsheng, director of the State Administration of Foreign Exchange, said last month.
To support the new benchmark, China has opened more than 6,000 trading accounts for the crude futures contract, Reuters reported in July.
'Well-advanced'
The market's response to the yuan-priced oil benchmark is likely to be lukewarm at first, "but could grow over time, especially if it sparks other commodity hedging tools," said Rachel Ziemba, managing director of emerging markets at Roubini Global Economics.
China is likely to approach its main crude oil suppliers in the Middle East, Russia and Asia — some of who already accept the yuan as payment — to price their cargoes off a Chinese benchmark.
"The U.S. coverage is dropping off," said Juerg Kiener, managing director and chief investment officer of asset manager Swiss Asia Capital. "Iraq, Russia and Indonesia have all joined in non-dollar trades."
The petro-yuan is "well-advanced" and already "structurally in place," Kiener added: "As China is an importer it will push harder to get yuan contracts."
https://www.cnbc.com/2017/10/24/petro-yuan-china-wants-to-dethrone-dollar-rmb-denominated-oil-contracts.html
February 20, 2018, 08:00:27 AM
Oil is traded on world markets only for dollars. I don't believe Venezuela can give up the dollar. The main pair of trading in the cryptocurrency market is BTC / USD. Therefore, cryptocurrencies can't help giving up the dollar either. It seems to me that to restore Venezuela's economy, it is necessary to make sure that the government does not steal. This will have a greater effect than giving up the dollar.
February 20, 2018, 07:37:35 AM
I don't think they will launch , it was just a threat for US and was a " Dialogue " by President.
He want to threat US that he will stop using US Dollar in business and start his own Cryptocurrency. I don't think he was serious.
He want to threat US that he will stop using US Dollar in business and start his own Cryptocurrency. I don't think he was serious.
February 20, 2018, 07:12:57 AM
Quote
Venezuela will launch a pre-sale of its commodity-backed "petro" cryptocurrency on Tuesday.
President Nicolas Maduro hopes the country's own digital currency will help it to make financial transactions and get around Western sanctions.
Both the United States and the European Union have imposed economic sanctions on Venezuela over their opposition to its autocratic government. Last year, the Economist Intelligence Unit's Democracy Index downgraded Venezuela from a "hybrid regime" to an "authoritarian regime" due to its "continued slide towards dictatorship."
Venezuela's petro token will be backed by its oil, gas, gold and diamond reserves, according to the government. The country's cryptocurrency regulator said Friday that it would draw investment from Qatar, Turkey and other Middle Eastern countries, as well as from European nations and the U.S.
The petro will not be available in the Venezuelan bolivar initially. Venezuela's own hard currency collapsed as the South American state grappled with crippling hyperinflation.
Caracas has attracted a number of skeptics as it gears up to launch its cryptocurrency pre-sale.
Many doubt its digital currency venture will bring much benefit to either Venezuela's economy or its people, who are suffering shortages in food and medicine due to price controls.
Francisco Toro, a Venezuelan journalist, political scientist and blogger, said that Venezuela was turning to cryptocurrency out of "desperation" because of its economic isolation from the United States.
"They have been trying to figure out ways to get around anti-money laundering sanctions provisions, and crypto is maybe one way they can do that," Toro, who is editor of the blog Caracas Chronicles, told CNBC in a phone interview Saturday.
"I do think that part of this is about getting investors from non-traditional lenders, from Russia and China, to put in some more money, to lend fresh cash. The financial sanctions — the U.S. sanctions, the European sanctions — are not the main reason Venezuela can't raise financing. The main reason Venezuela can't raise financing is that macroeconomic finance is a s--- show."
As well as quadruple digit inflation, Venezuela has been facing an oil production collapse. Venezuelan crude production fell 29 percent in 2017. Many fear the accelerated fall in Venezuela's oil output will increase the likelihood of it defaulting on its debts.
Toro said that Venezuela's economic woes have given it a bad credit reputation and that the government was trying to convince itself of the validity of chavismo, the left-wing political ideology established under former President Hugo Chavez.
"This idea that sanctions are hemming demand, that they need to need to get around sanctions, this is chavismo drinking their own Kool Aid and believing their own propaganda."
'Desperation breeds innovation'
But one analyst thinks the petro is an "excellent idea" and could serve as a precursor to similar projects from other world leaders, including Russian President Vladimir Putin.
"Putin and Maduro have very similar problems," Mati Greenspan, senior market analyst at social trading firm eToro, told CNBC in an email last week. "They both have a high dependence on the price of crude oil, which has been rather unstable in the last few years. They both have issues with U.S. sanctions and with the U.S. dollar being the world reserve currency."
He added: "To think that of all the governments and banks who are toying with the idea it would be Nicolas Maduro who gets there first. I suppose desperation breeds innovation."
Reports have emerged in recent months of Russia considering a digital version of its own currency, the rouble. Russia's "cryptorouble" could be used as a means for the country to circumvent Western sanctions, a report in the Financial Times said last month, echoing Maduro's own plans for Venezuela's petro token.
CNBC contacted the Russian government's press office for comment but a spokesperson was not immediately available.
Greenspan gave praise for the country's plan to back petro tokens with its commodity reserves. Maduro has said petro tokens will each be pegged to the price of one barrel of Venezuelan oil.
"It's an excellent idea to back the crypto with a hard commodity as the world is currently flooded with baseless money," he said. "Surprisingly, we've seen very little support for this initiative in the crypto community, most likely because it seems the Venezuelans themselves don't seem to have made up their minds just yet."
Greenspan added: "In any case, I believe that the petro is actually targeting more institutional investors and other governments. They have more to spend then the crypto-billionaires anyway. No matter what happens, this is going to be an excellent pilot for Putin."
Toro, however, expressed severe doubt that other countries — especially Russia — would look to Venezuela's cryptocurrency for inspiration for their own projects experimenting with the technology.
"There is a science establishment in Russia," Toro said, adding, "If Russia is going to launch a crypto, they are not going to copy some banana republic. It's ridiculous. It's totally silly. I do think it's mostly noise."
An expert on cryptocurrencies said he was "not fully convinced" that the petro's backing in oil and mineral reserves would live up to expectations.
"This is basically an E&P (exploration and production) play from the traditional oil and gas market with a large dose of sovereign risk and room for manipulation," Charles Hayter, chief executive of cryptocurrency comparison site CryptoCompare, told CNBC in an email.
Countries hit with sanctions are not alone in considering the possibility of their own digital currency. Many around the world are mulling the idea of virtual currency.
Sweden, for example, is looking into the possibility of a digital version of the Swedish crown, the "ekrona." Cash use in the Scandinavian country has steeply declined in recent years.
Others, including Japan, Singapore and Estonia, are also considering such digital alternatives to hard currency.
https://www.cnbc.com/2018/02/19/venezuela-petro-cryptocurrency-pre-sale-starts-february-20.html
President Nicolas Maduro hopes the country's own digital currency will help it to make financial transactions and get around Western sanctions.
Both the United States and the European Union have imposed economic sanctions on Venezuela over their opposition to its autocratic government. Last year, the Economist Intelligence Unit's Democracy Index downgraded Venezuela from a "hybrid regime" to an "authoritarian regime" due to its "continued slide towards dictatorship."
Venezuela's petro token will be backed by its oil, gas, gold and diamond reserves, according to the government. The country's cryptocurrency regulator said Friday that it would draw investment from Qatar, Turkey and other Middle Eastern countries, as well as from European nations and the U.S.
The petro will not be available in the Venezuelan bolivar initially. Venezuela's own hard currency collapsed as the South American state grappled with crippling hyperinflation.
Caracas has attracted a number of skeptics as it gears up to launch its cryptocurrency pre-sale.
Many doubt its digital currency venture will bring much benefit to either Venezuela's economy or its people, who are suffering shortages in food and medicine due to price controls.
Francisco Toro, a Venezuelan journalist, political scientist and blogger, said that Venezuela was turning to cryptocurrency out of "desperation" because of its economic isolation from the United States.
"They have been trying to figure out ways to get around anti-money laundering sanctions provisions, and crypto is maybe one way they can do that," Toro, who is editor of the blog Caracas Chronicles, told CNBC in a phone interview Saturday.
"I do think that part of this is about getting investors from non-traditional lenders, from Russia and China, to put in some more money, to lend fresh cash. The financial sanctions — the U.S. sanctions, the European sanctions — are not the main reason Venezuela can't raise financing. The main reason Venezuela can't raise financing is that macroeconomic finance is a s--- show."
As well as quadruple digit inflation, Venezuela has been facing an oil production collapse. Venezuelan crude production fell 29 percent in 2017. Many fear the accelerated fall in Venezuela's oil output will increase the likelihood of it defaulting on its debts.
Toro said that Venezuela's economic woes have given it a bad credit reputation and that the government was trying to convince itself of the validity of chavismo, the left-wing political ideology established under former President Hugo Chavez.
"This idea that sanctions are hemming demand, that they need to need to get around sanctions, this is chavismo drinking their own Kool Aid and believing their own propaganda."
'Desperation breeds innovation'
But one analyst thinks the petro is an "excellent idea" and could serve as a precursor to similar projects from other world leaders, including Russian President Vladimir Putin.
"Putin and Maduro have very similar problems," Mati Greenspan, senior market analyst at social trading firm eToro, told CNBC in an email last week. "They both have a high dependence on the price of crude oil, which has been rather unstable in the last few years. They both have issues with U.S. sanctions and with the U.S. dollar being the world reserve currency."
He added: "To think that of all the governments and banks who are toying with the idea it would be Nicolas Maduro who gets there first. I suppose desperation breeds innovation."
Reports have emerged in recent months of Russia considering a digital version of its own currency, the rouble. Russia's "cryptorouble" could be used as a means for the country to circumvent Western sanctions, a report in the Financial Times said last month, echoing Maduro's own plans for Venezuela's petro token.
CNBC contacted the Russian government's press office for comment but a spokesperson was not immediately available.
Greenspan gave praise for the country's plan to back petro tokens with its commodity reserves. Maduro has said petro tokens will each be pegged to the price of one barrel of Venezuelan oil.
"It's an excellent idea to back the crypto with a hard commodity as the world is currently flooded with baseless money," he said. "Surprisingly, we've seen very little support for this initiative in the crypto community, most likely because it seems the Venezuelans themselves don't seem to have made up their minds just yet."
Greenspan added: "In any case, I believe that the petro is actually targeting more institutional investors and other governments. They have more to spend then the crypto-billionaires anyway. No matter what happens, this is going to be an excellent pilot for Putin."
Toro, however, expressed severe doubt that other countries — especially Russia — would look to Venezuela's cryptocurrency for inspiration for their own projects experimenting with the technology.
"There is a science establishment in Russia," Toro said, adding, "If Russia is going to launch a crypto, they are not going to copy some banana republic. It's ridiculous. It's totally silly. I do think it's mostly noise."
An expert on cryptocurrencies said he was "not fully convinced" that the petro's backing in oil and mineral reserves would live up to expectations.
"This is basically an E&P (exploration and production) play from the traditional oil and gas market with a large dose of sovereign risk and room for manipulation," Charles Hayter, chief executive of cryptocurrency comparison site CryptoCompare, told CNBC in an email.
Countries hit with sanctions are not alone in considering the possibility of their own digital currency. Many around the world are mulling the idea of virtual currency.
Sweden, for example, is looking into the possibility of a digital version of the Swedish crown, the "ekrona." Cash use in the Scandinavian country has steeply declined in recent years.
Others, including Japan, Singapore and Estonia, are also considering such digital alternatives to hard currency.
https://www.cnbc.com/2018/02/19/venezuela-petro-cryptocurrency-pre-sale-starts-february-20.html
More details on venezuela's petrocrypto emerge.
- Venezuela will launch a pre-sale of its commodity-backed "petro" cryptocurrency on Tuesday(today?)
- Backed by oil, gas, gold & diamond
- "Backed by oil" may not mean much as Venezuelan crude production fell 29 percent in 2017
- Venezuelan petrocrypto may be an attempt to avoid economic sanctions by the USA and EU
I would also like to contend that currencies being gold backed no longer matters in this day and age. There's no relevent difference between electronic money in a cashless society or bitcoin. Its all printed out of thin air and "baseless money".
Quote
Greenspan gave praise for the country's plan to back petro tokens with its commodity reserves. Maduro has said petro tokens will each be pegged to the price of one barrel of Venezuelan oil.
"It's an excellent idea to back the crypto with a hard commodity as the world is currently flooded with baseless money," he said.
"It's an excellent idea to back the crypto with a hard commodity as the world is currently flooded with baseless money," he said.
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