Venezuela to Use the Petro to Buy Auto Parts from Russia

Venezuelan government intends to purchase Russian auto parts with its state-issued cryptocurrency. Ministers from both countries have discussed the use of the petro in bilateral transactions during a high-level meeting in Caracas. Possible Russian crypto investments are also on the agenda.

Also read: Venezuelans to Buy Homes and Property with State Cryptocurrency

Caracas to Build Kamaz with Kits Paid in Crypto

Officials from Venezuela and Russia have agreed to expand the economic cooperation between the two countries. The bilateral intergovernmental commission met over the weekend in Venezuela’s capital. Talks covered different aspects of the “strategic partnership”. The two sides discussed joint projects in areas like energy, construction, and the military. The ministers have also talked about the use of Venezuela’s recently issued cryptocurrency in international transactions. Possible Russian crypto investments have been mentioned, as well.

The South American country revealed plans to assemble the Russian Kamaz trucks. Caracas intends to pay for the auto parts in petro, Russian and local media reported. The national cryptocurrency will be used to purchase components, tires, batteries and spare parts, according to the Venezuelan minister of foreign trade Jose Vielma Mora. “The cooperation includes payments with the petro,” Mora said, quoted by Agencia Venezolana de Noticias.

Venezuela and Russia want to increase the volume of their bilateral trade by 30 percent this year. The two sides have discussed other strategic projects, including an alliance between the energy companies Rosneft and Petroleos de Venezuela. The economic relations will be expanded amid intensifying western sanctions imposed on both nations. Last month U.S. president Donald Trump signed an executive order banning American citizens from using the Venezuelan crypto. According to media reports, Russia may have been involved in its development. Officials in Moscow have rejected the allegations.

The administration of President Nicolás Maduro launched the petro in February. Authorities in Caracas claim they have raised $735 million USD with the pre-sale of the government-issued cryptocurrency. More than 200,000 orders from 133 countries have been placed during the 30-day period.

From March 23 the petro can be purchased with Russian rubles, Chinese yuan, Turkish lira and euro, as well as with cryptocurrencies like bitcoin. Maduro announced the creation of four exclusive economic zones where it will be accepted as a means of payment. Venezuelans will be able to buy houses and other property with the oil-backed crypto. Real estate deals in petro will be authorized on April 20.

EAEU Country May Soon Issue Another State Coin

The use of cryptocurrency to evade sanctions has been discussed also in Russia. Last summer the Central Bank announced intentions to study possibilities to emit a “virtual national currency”. However, decisions on the so called “cryptoruble” have been postponed. In December, CBR’s Deputy President Olga Skorobogatova said that Russia would hold consultations with its partners from the EAEU and BRICS on creating a common digital coin for transactions between the member-states.

On Tuesday Skorobogatova confirmed that discussions are underway on the possible use of distributed ledger technologies to process transactions and transmit financial information within the Eurasian Economic Union. Armenia, Belarus, Kazakhstan, Kyrgyzstan and the Russian Federations are members of the organization. Belarus has become the first to legalize crypto-related activities, with Russia set to do the same by the summer.

Last week President Putin’s adviser on regional policy Sergey Glazyev hinted that an EAEU country might issue a national cryptocurrency by the end of the year. During the BlockchainRF-2018 conference in Moscow, Glazyev said that the first member-state to create its own crypto will gain “gigantic advantages”. Until that happens, Venezuela remains the only country in the world that has issued a national cryptocurrency.

Do you think Venezuela will succeed in its efforts to introduce the petro in its international trade relations? Share your expectations in the comments section below.

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