Venezuela's President Nicolas Maduro launched new Venezuelan cryptocurrency
Venezuela's President Nicolas Maduro launched new Venezuelan cryptocurrency "petro" on Tuesday.REUTERS/Marco Bello

The Venezuelan government on Tuesday launched its official cryptocurrency called "petro", and also announced its pre-sale.

Venezuela's President Nicolas Maduro first announced the controversial petro token in early December last year in response to US sanctions amid the country's economic downfall.

Petro (PTR) is backed by Venezuela's vast oil reserves. The government said it would initially make 82.4 million tokens available. Maduro previously said his government would issue as many as 100 million petros, valued at over $6 billion ($60 per coin).

"Petro is born and we are going to have a total success for the welfare of Venezuela," Maduro reportedly said while launching the cryptocurrency. "The largest and most important companies and blockchain in the world are with Venezuela, we are going to sign agreements."

Maduro also said on Tuesday that the country had received $735 million in the first day of the pre-sale of petro.

The beleaguered South American country outlined its plans on a new website built for petro. The website is hosted by Venezuela's Ministerio del Poder Popular para Educacion Universitaria Ciencia, Tecnologia (MPPEUCT).

10 important aspects you need to know about petro:

1. Each petro token will be valued at and backed by a barrel of Venezuelan crude oil.

2. After the pre-sale, which is expected to close on March 19, the government will follow up with an initial coin offering of 44 million tokens.

3. The petro cryptocurrency will not be a token on the ethereum network as previously disclosed. According to the white paper, it will be on the NEM blockchain platform.

4. 38.4 percent of the 100 million petros will be available for private sale.

5. 17.6 percent will be retained by the Venezuelan Superintendency of Currency and Related Activities (SUPCACVEN).

6. Petro's minimum exchange unit will be called Mene (0.00000001).

7. Petro can be used to purchase goods or services, and will be redeemable for fiat money and other crypto assets or cryptocurrencies through digital exchange houses.

8. It can perform the functions of digital representation of goods or raw materials (e-commodity). It can also be used to create other digital instruments for both national and international trade.

9. Petro will be available for free exchange in cryptocurrency exchanges around the world.

10. Venezuela is also planning to launch an exchange for petro next month.

Venezuelan cryptocurrency
Venezuelan cryptocurrency "Petro" logo is seen during its launching in Caracas, Venezuela on Tuesday.REUTERS/Marco Bello

Criticism all over

Despite being the first cryptocurrency to be issued by a federal government, petro has been criticized by lawmakers from both inside and outside the country. A member of the opposition-controlled Congress in Venezuela recently called the currency "illegal" and accused it of being fuel for corruption in the country.

Some US lawmakers have also expressed concerns about petro, and asked the country's Treasury Department in January to monitor and restrict the currency.

Meanwhile, blockchain experts have also warned that the petro cryptocurrency may not attract investments as significant as expected by the government, which hasn't shared details about who invested in the petro pre-sale.