Venezuela and Russia Are Collaborating on Cryptocurrency

Venezuelan and Russian government officials met last week in Moscow to discuss the launch of Venezuela's new petro cryptocurrency, according to Coindesk. (See also: Venezuela Claims To Have Pre-Sold $735 Million of Petro Cryptocurrency.)

The terms of the meeting remain unclear, but it seems that Russian officials have taken an interest in Venezuela's state-backed digital currency. What are the implications for a potential collaboration? And what might that collaboration even look like?

Venezuelan Finance Minister Simon Zerpa Delgado met with Russian officials in Moscow the day after the petro launched, according to tweets published through his official account. While it's possible that the meetings focused on other issues as well, the topic of the petro, which was launched late in February, came up.

'Economic and Financial Cooperation'

Delgado tweeted (translated from Spanish): "In this meeting we have reviewed the economic and financial cooperation between the two countries, with emphasis on the new [cryptocurrency] of Venezuela: the petro."

He continued (see tweet below): "Russia and Venezuela will continue to strengthen their trade balance. We will continue advancing in the construction of a multipolar and pluricentric world, free of imperial tensions."

Delgado's Twitter statements were broad and vague, suggesting only that Russia and Venezuela were in discussions regarding the dubious new cryptocurrency, which is supposedly linked to Venezuela's oil reserves. (See more: Venezuela's Petro Isn't Oil-Backed. It's Not Even a Cryptocurrency.)

It remains unclear exactly what role, if any, Russia's government will play in the development or proliferation of the petro. Venezuelan president Nicolas Maduro has suggested that the petro will be useful in bypassing international sanctions imposed on the country.

Many Venezuelans Are Skeptical of the Petro

Venezuela does not have many amicable relationships with other governments around the world, so it may be hoping that Russia can help to bridge the gap between itself and other countries. A Russian company called Aerotrading has already been linked with the petro cryptocurrency project.

Even among Venezuelan citizens, the petro is a polarizing topic. Some view it as a sign of a "new economic era," while others believe it is yet another vehicle for government corruption in a country that has already experienced massive levels of inappropriate activity. Whether or not the international community accepts the petro remains to be seen.

Investing in cryptocurrencies and other Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns cryptocurrencies.

Take the Next Step to Invest
The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.