Venezuela’s State-Backed Petro Coin Rakes in $3.3Bln; Iran and Turkey To Launch National Cryptocurrency

Cryptocurrency Market Rebounds But Faces Resistance to Breach $10K; NASDAQ Might Trade Digital Coins

April 27, 2018 (BE2C2): A presale of Venezuela’s state-backed digital currency called Petro coin has raked in $3.3 billion, President Nicolas Maduro said.

Maduro said in a statement on Thursday the proceeds would be transferred to the central bank to be auctioned off via foreign exchange platform DICOM, according to the AVN news agency.

The cash-strapped South American nation launched the presale of its oil-backed cryptocurrency on February 20. Maduro plans that the central bank will exchange Petro tokens for gold.

In a related development, Iran and Turkey recognize the innovation of digital currencies; both countries are looking to launch their coins – which will be issued by their Central Banks.

Also Read: Iran Considers Currency Swaps With Turkey to Ease Trade, Banking Transactions

Via a rough translation, Iran’s minister of information and communications technology – Mohammad Javad Azari Jahromi said in February, “In a meeting with the board of directors of Post Bank on digital currencies based on the blockchain, I … prescribed … measures to implement the country’s first cloud-based digital currency,”

Turkish parliamentarians have also been trying to make a consensus for the potential launch of state-backed cryptocurrency called “Turkcoin.”

Iran and Venezuela are among those countries that have been facing strict sanctions from the United States and the United Nations. Both countries are facing a financial crisis, and they aren’t allowed to sell their products and services in international markets – the idea of raising and moving cash through digital currencies has been viewed as an attempt to evade sanctions.

Venezuela raised almost $750 million through initial coin offerings (ICO) of Petro in February.

Though the launch of coins from Central Banks enhanced trader’s confidence in the future of digital currencies; at least for the time being – the new phenomena has also raised several questions over cryptocurrencies that aren’t backed by assets such as oil, gold or U.S. Dollars.

Analysts and regulators had strongly criticized cryptocurrencies, amid lack of underlying value and the substantial price volatility.

Bitcoin price (BTC) is moving in the tight range of $9,000 over the last couple of days. The largest coin hit $9,700 level on Wednesday before falling back to $8,800 in the next couple of hours.

Bulls are facing stiff resistance from bears in breaching the psychological $10K mark

Analysts say with the authorization from Central Banks and backed by real cash assets, these national coins like Petro and Turkcoin would have the potential to outpace other cryptocurrencies that are launched by individuals and mined by private companies.

The United States has a different view on digital currencies. It publicized strong concerns over the launch of virtual coins. U.S. senators said: “It is imperative that the U.S. Treasury Department is equipped with tools and enforcement mechanisms to combat the use of cryptocurrency to evade U.S. sanctions in general.”

However, John Pfeffer, the partner at Pfeffer Capital, predicts that bitcoin has the potential to replace the gold. He said, “Bitcoin is better ‘on every front’, according to numerous media outlets.”

Pfeffer claims that if BTC coin can substitute 25% of total country’s foreign reserves, its value could increase to $6.4 trillion. Pfeffer said, “While he is a big fan of bitcoin and blockchain technology, not all cryptocurrencies are viable, and many are bad bets.”

The partnership between Gemini exchange and the NASDAQ has optimized trader’s sentiments in future fundamentals of cryptocurrency markets. Additionally, the CEO of Nasdaq exchange hinted to become cryptocurrency exchange over the coming time. Nasdaq CEO Adena Friedman said. “If we do look at it and say ‘it’s time, people are ready for a more regulated market,’ for something that provides a fair experience for investors.”

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