Venezuela Tries To Pay Russian Debt With Cryptocurrency | Zero Hedge
Description: Venezuela will not be paying any part of its debt to Russia with its cryptocurrency, the head of the Russian Finance Ministry’s state debt department, Konstantin Vyshkovsky, has said.

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# Venezuela Tries To Pay Russian Debt With Cryptocurrency

Authored by Tsvetana Paraskova via OilPrice.com,

If crisis-hit Venezuela was hoping to pay off its US$3.15-billion debt to Russia with its new cryptocurrency, those hopes have been shattered as the Russian Finance Ministry announces that it won’t be accepting digital coin.

Venezuela will not be paying any part of its debt to Russia with its cryptocurrency, the head of the Russian Finance Ministry’s state debt department, Konstantin Vyshkovsky, has said.

In November last year, Russia threw a life-line to Venezuela after the two countries signed a deal to restructure US$3.15 billion worth of Venezuelan debt owed to Moscow. Under the terms of the deal, Venezuela will be repaying the debt over the next ten years, of which the first six years include “minimal payments”.

The following month, Venezuelan President Nicolas Maduro announced that his country would be issuing an oil-backed cryptocurrency, which it did, in February this year.

Maduro’s propaganda machine is touting the digital coin as a ‘ground-breaking’ first-ever national crypto currency, the El Petro--backed by 5 billion barrels of oil reserves in Venezuela’s Orinoco Belt.

But most observers see this crypto issuance as a desperate attempt to skirt U.S. financial sanctions.

Earlier this month, U.S. President Donald Trump banned U.S. purchases, transactions, and dealings of any digital coin or token issued for or by the government of Venezuela.

Last week, Time magazine reported that Russia secretly helped Venezuela in creating the Petro, with the purpose of undermining the power of U.S. sanctions, the magazine reported, citing sources familiar with the effort.

Russia slammed the Time report as “fake news”, with Deputy Director of the Information and Press Department of the Russian Foreign Ministry, Artyom Kozhin, saying that Russia and Venezuela had never worked together on the development of the Venezuelan cryptocurrency.

Russia and China are the last holdouts that still finance Venezuela, which is digging deeper into the downward spiral of economic crisis, hyperinflation, and crumbling oil production. However, China is reportedly thinking of cutting off Venezuela from new loans. This would leave Russia as the only financial supporter of the Maduro regime, and if all it’s got is a crypto coin that no one really believes in to pay off debt, loans are likely to be plentiful.

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Jack Oliver Thu, 03/29/2018 - 02:51 Permalink

I am sure Russia will accept GOLD backed ‘Petro Yuan’ though - if not China will !!

No other way out for Venezuela !

Russia will have to accept their OIL !

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Silver Shield Jack Oliver Thu, 03/29/2018 - 02:57 Permalink

#HODL2ZERO

#SilverEternal

In reply to I am sure Russia will accept… by Jack Oliver

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RAT005 Silver Shield Thu, 03/29/2018 - 03:18 Permalink

Didn't Venezuela lose its gold back to USA? I think it's Citibank that is "holding" if for them.

In reply to #HODL2ZERO #SilverEternal by Silver Shield

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Adolph.H. RAT005 Thu, 03/29/2018 - 03:21 Permalink

Maduro wanting to have it both ways. Funny.

There's a well known saying that goes something like: "one lends his money only to the rich".

There you have it, without credibility you can't just throw a magical virtual printing machine out of thin air and declare it will solve all your problems.

On the other hand Russia is going to be pretty happy securing Venezuela's oil as a collateral. I'm sure the deep state USA will appreciate...

In reply to Didn't Venezuela lose its… by RAT005

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NidStyles Adolph.H. Thu, 03/29/2018 - 03:38 Permalink

Your third paragraph is negated by reality, you can do it and you can get away with it if you have nukes. All of the worlds major powers are doing it right now.

In reply to X by Adolph.H.

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Shemp 4 Victory NidStyles Thu, 03/29/2018 - 03:52 Permalink

This article is hogwash. Venezuela has been paying back its debts to Russia.

https://z5h64q92x9.net/proxy_u/ru-en.ru/https/colonelcassad.livejournal…

In reply to Your third paragraph is… by NidStyles

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DownWithYogaPants Shemp 4 Victory Thu, 03/29/2018 - 07:25 Permalink

It's cold in Russia. Can you use wheelbarrows full of USB drives as kindling?

A cryptocurrency issued by a government is quite analogous to a concrete life preserver ring. It may have the right shape but it does not have the right function.

You know when people write L.O.L. - laugh out loud? I literally laughed out loud when I saw the title. LLOL. Vlad did worse than accept a government backed CC He extended credit to a Latin American. One thing I learned from Brazil is that you will get in very good shape chasing behind a Brazilian who owes you money.

With all my Petros I bought a ROFLicoptor. Imagine how much I save on gas? It is flex fuel. It runs on chuckles or laughing gas.

In reply to This article is hogwash… by Shemp 4 Victory

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21st.century Shemp 4 Victory Thu, 03/29/2018 - 07:35 Permalink

Vlad the Farmer can trade some of that low value- excess wheat russia produces-- in exchange for Venezuelan oil "reserves" to collect the debts .... of course, Vlad will have to do the extracting since Venezuela has lost the knowledge to produce the oil.

"i'll gladly pay you Tuesday... for a hamburger today "

oh BTW, fuck Putin

In reply to This article is hogwash… by Shemp 4 Victory

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DownWithYogaPants 21st.century Thu, 03/29/2018 - 07:44 Permalink

When I saw Putin standing next to Obama it was an aha moment for me. That's when I saw the roles had flipped.

We had the petty dicktator and they had the leader.

In reply to Vlad the Farmer can trade… by 21st.century

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Hotapplebottoms DownWithYogaPants Thu, 03/29/2018 - 12:14 Permalink

10 bucks cash says they would accept it if it was a US crypto asset. fuck you sephardi cryptojew bus driver.

In reply to When I saw Putin standing… by DownWithYogaPants

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52821740 Silver Shield Thu, 03/29/2018 - 06:47 Permalink

Hilarious.

Nice try but Russia would be too smart to accept a Venezuelan Crypto.

In reply to #HODL2ZERO #SilverEternal by Silver Shield

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nmewn 52821740 Thu, 03/29/2018 - 06:56 Permalink

See, here's the thing.

I owe the Russians like, 3.5 billion dollars, I'm a dead ass broke socialist retard (but I repeat myself), my peeps are starving & dying and all the production capacity in my nation is going into it's final death rattle.

So how am I going to get the Russians off my back about that 3.5 bil?

I know! I'll invent a currency from nothing! I'll call it the El Petro and give it to them!

Nyet!...lol.

In reply to Hilarious. … by 52821740

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kralizec nmewn Thu, 03/29/2018 - 08:26 Permalink

There is a better option...

https://youtu.be/Swvf3w6hcY4

In reply to See, here's the thing… by nmewn

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zebra77a nmewn Thu, 03/29/2018 - 09:45 Permalink

Half of Venezuela is starving..

Growing Power grew 1,000,000 lbs of food off 3 acres - in one year, its about 915 lbs of food A DAY off each acre.

Currently Venezuela has 916445 sq km of which astoundingly only 3.06% is considered arable.

Which gives them 69.29 Million acres of arable land, and if they applied the techniques of Growing Power they would have..

2003 lbs of food Per Person PER DAY.

If they built greenhouses across 12.7 million acres of their current arable land they could grow 5 lbs of food per day for 7,000,000,000 people (the whole planet).

The problem is it may require up to 160 manhours to process and grow 2003 lbs of food by hand (rough estimates.) Approximately 12 lbs per hour worked. This is from a 1958 study from Cornell into growing broccoli. Today it would be expected to be much higher... It would require their population increasing 1600% to about 530 million to manually feed the whole planet from greenhouses. Bring in enough robots grant you and different techniques if we can harvest 300lbs of food for each manhour worked we are then talking about them being able to feed the entire planet with only 21 million laborers or robot managers or whatever you want to call them. And that is with 100 days off a year.

If they ALL worked 8 hours a day totally manually they could produce only about 95 lbs of food a day per person for themselves.

So if 1 member of a family worked 1 day a week (8 hours) they could produce approximately 100 lbs of food giving a family of five 100 over 35 or about 3 lbs of food a day..

It takes a very coordinated and concerted effort for a population to starve itself. It *really* takes a lot of work. First you need to make sure that nobody knows how to take care of themselves, to be highly conditioned to only eat what is given to them, and to make sure that nobody knows how to grow. Finally you have to make sure that the cultural value of the people is one of stealing and looting to make sure that food supply lines are disrupted so that grocery stores cannot stock themselves. you need a complicit regulatory body that will make sure this is enabled. And you need highly disciplined people that will NOT under any circumstances attempt to feed themselves. Then you need a closed border so they do not all run away and survive off a neighbor economy..

I have no idea how they managed to pull this off I really do not.. Its a pretty amazing feat.

In reply to See, here's the thing… by nmewn

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nmewn zebra77a Thu, 03/29/2018 - 10:21 Permalink

And yet the "Chavismo's" like Danny Glover, Sean Penn, Naomi Campbell, Oliver Stone etal...haven't grabbed a hoe and shovel to go back down to help out.

They were perfectly fine running their mouths until it blew up in their faces now nothing.

But that's what elite socialists (crony or otherwise) do, they never break a sweat preferring to yap all day while others bust their asses trying to implement the elitists grandiose schemes and when the shits in the wind these fuckers are no where to be found.

In reply to Growing Power grew 1,000,000… by zebra77a

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herbivore nmewn Thu, 03/29/2018 - 10:35 Permalink

What you have, besides a lot of oil, is a land mass in a location alarmingly close to the U.S. (from the U.S. perspective) and that might have some value to Russia. That said, hypersonic missiles on stealthy submarines, if Russia has that, sort of moots land mass proximity, insofar as it advantages a participant in war.

In reply to See, here's the thing… by nmewn

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EddieLomax 52821740 Thu, 03/29/2018 - 09:23 Permalink

Actually even Russia is going to balk at the costs of keeping this socialist party going.

So why doesn't Trump play a game, offer loans to keep them going in return for reforms where they effectively allow capitalism back into the country and a free and fair press and opposition.

They won't take the money, so it will be a cheap way to score a easy win. The only way Russia can play then is either to walk away or take the losing side of the deal and keep a failing government in power.

In reply to Hilarious. … by 52821740

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RedBaron616 Jack Oliver Thu, 03/29/2018 - 08:16 Permalink

No, Russia will accept GOLD, not supposedly Gold "backed" "Petro Yuan". Would you trust the Chinese Communist Party? I suspect Russia doesn't either.

In reply to I am sure Russia will accept… by Jack Oliver

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BarkingCat RedBaron616 Thu, 03/29/2018 - 10:57 Permalink

Never trust the Chinese in business.

Only thing that keeps them honest is that bad reputation would end their business ventures.

This is why they are usually good sellers on ebay and sites with feedback mechanism.

It keeps them honest. It is a forced honesty.

In reply to No, Russia will accept GOLD,… by RedBaron616

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Offthebeach Jack Oliver Thu, 03/29/2018 - 10:01 Permalink

Need special refineries for Venz tar dirty oil. Russia no have. Oil production of low grade, expensive fo refine oil under Peoples Government down by half.

Best deal for Russia is to keep supporting the Venz oil production DESTROYING government, thus taking oil off world market, and thus Russia oil gets better price.

Just like Russia always paid bills of euro nuclear/coal lefties. Drive the euro cucks( save France ) to suck Russian gas pipes.

In reply to I am sure Russia will accept… by Jack Oliver

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Aussiekiwi Thu, 03/29/2018 - 02:51 Permalink

and if all it’s got is a crypto coin that no one really believes in to pay off debt, loans are likely to be plentiful.

doesn't he mean:

and if all it’s got is a crypto coin that no one really believes in to pay off debt, loans are UNLIKELY to be plentiful.

Sorry for being pedantic, but the last sentence was the entire point of the article.

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highly debtful Aussiekiwi Thu, 03/29/2018 - 03:16 Permalink

Or the author was simply being sarcastic. When it comes to assessing the way the Venezuelan government is managing its economy, there's plenty of room for that.

Incidentally, in the old days clueless leaders would try to pay back international creditors with their increasingly worthless national currency. This guy creates a national cryptocurrency and tries to settle his debt with it.

You have to give him credit (pardon the pun) for keeping up with the latest financial trends.

In reply to and if all it’s got is a… by Aussiekiwi

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just the tip highly debtful Thu, 03/29/2018 - 07:17 Permalink

if it's sarcasm tyler wants, that's why he has the commenters here at ZH, where typos are a brand.

but that last sentence deserves attention due to it going to the meaning of the article. maybe one of soros's goons is a tyler? watch out of asian chicks with LOL shirts.

In reply to Or the author was simply… by highly debtful

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DownWithYogaPants just the tip Thu, 03/29/2018 - 07:48 Permalink

Perhaps Maduras has some left over Chavez tee shirts he can pay with.

In reply to if it's sarcasm tyler wants,… by just the tip

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Ahmeexnal Thu, 03/29/2018 - 02:51 Permalink

Venezuela, the workers paradise. Where a community working bus driver becomes president. That could never happen in the USA, right??

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lookslikecraptome Ahmeexnal Thu, 03/29/2018 - 03:05 Permalink

Crypto coins van a la luna. BTFD coineratti. I know the sarc tag is not needed. Me llamo es Senor Hodler.

In reply to Venezuela, the workers… by Ahmeexnal

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roddy6667 Ahmeexnal Thu, 03/29/2018 - 06:24 Permalink

Truman ran a haberdashery.

Lincoln was a failed general store owner.

In reply to Venezuela, the workers… by Ahmeexnal

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Arnold roddy6667 Thu, 03/29/2018 - 08:27 Permalink

Grant was a fail at all commerce.

In reply to Truman ran a haberdashery… by roddy6667

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kralizec roddy6667 Thu, 03/29/2018 - 08:28 Permalink

Incorrect, Lincoln was primarily a lawyer and a circuit judge before being President.

Grant was a failed store operator...and had a habit of being swindled by people.

In reply to Truman ran a haberdashery… by roddy6667

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UmbilicalMosqu… Ahmeexnal Thu, 03/29/2018 - 07:23 Permalink

We are a collective...a collective insanity.

In reply to Venezuela, the workers… by Ahmeexnal

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Jballsquared Thu, 03/29/2018 - 02:53 Permalink

Hugo Chavez was Satoshi Nakamoto.

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saldulilem Thu, 03/29/2018 - 03:03 Permalink

Russia won't accept cryptocurrency? Stupid oldbugs!

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I am Groot Thu, 03/29/2018 - 03:11 Permalink

Venezuela is one step away from cannibalism. Who gives a shit about oil in the country at that point ? You can't eat oil.

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soyungato Thu, 03/29/2018 - 03:12 Permalink

The human race is sick. The US is fucking sick. How can one justify sanctioning and therefore starving a nation for no reason ? Kids killing each other with machetes to get access to better garbage piles for something to eat. Infants death rate jump 30% for lack of food. That is OK with you Mr. Trump ? I know I know, at least you did not kill them by dropping bombs like in other countries.

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debtor of last… soyungato Thu, 03/29/2018 - 06:15 Permalink

They ran out of other peoples money fuckhead. And they need $120 oil which the world cannot afford. So its garbage then, isn’t it?

In reply to The human race is sick. The… by soyungato

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Richard Chesler debtor of last… Thu, 03/29/2018 - 06:26 Permalink

Even $300/oil wouldn’t help the people. Socialist thugs appetite is insaciable.

In reply to They ran out of other… by debtor of last…

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deepelemblues soyungato Thu, 03/29/2018 - 06:53 Permalink

No sanctions they still starve just a little slower

Marxism = get degraded economically, politically, culturally, intellectually, your human dignity degraded too, and starve at the same time awesome

how many times does it have to happen before people give up on this shitty ideology in all its forms

In reply to The human race is sick. The… by soyungato

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UmbilicalMosqu… deepelemblues Thu, 03/29/2018 - 07:30 Permalink

It is easy to understand when you look at the vacuumed minds of dumbed-down adolescent weeds who, when fertilized with Red Marxist shit, then grow into adult Red Idiocy Pods.

In reply to No sanctions they still… by deepelemblues

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RedBaron616 soyungato Thu, 03/29/2018 - 08:20 Permalink

No doubt you were excited by the possibility that Maduro actually had a cryptocurrency, weren't you now? The fault of the collapse is clearly on Maduro and Socialism. You are probably a closet Socialist.

In reply to The human race is sick. The… by soyungato

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Haboob Thu, 03/29/2018 - 03:15 Permalink

Crypto is a hot potato. Whomever holds the tuber last carries the bags.

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are we there yet Thu, 03/29/2018 - 03:18 Permalink

How many petro coins to buy a papal sin indulgence.
Are papal sin indulgences an early form of god coin?

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21st.century are we there yet Thu, 03/29/2018 - 06:05 Permalink

similar to a carbon credit that Gore offers- Gore promises to plant a tree (somewhere on the Earth) with the carbon credits you buy from him.

talk about crypto ?

In reply to How many petro coins to buy… by are we there yet

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UmbilicalMosqu… are we there yet Thu, 03/29/2018 - 07:36 Permalink

Anyone who steals from a thief automatically gets 20 years free indulgence.

In reply to How many petro coins to buy… by are we there yet

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Manipuflation Thu, 03/29/2018 - 03:29 Permalink

I loan paper certificates redeemable in gold or silver at 57% bi-weekly.

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otschelnik Thu, 03/29/2018 - 03:33 Permalink

So Vlad told Nik only bucks, por favor. So much for the petroyuan.

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TeraByte Thu, 03/29/2018 - 04:23 Permalink

I pay you back in Linden dollars, said Maduro, but Putin stupid as he is, missed an opportunity to make huge gains from such a crypto-currency transaction.

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greven40 Thu, 03/29/2018 - 04:34 Permalink

Russia seems to go along with US demands on most things when it comes to sanctioning other nations.

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indygo55 greven40 Thu, 03/29/2018 - 07:05 Permalink

What do you mean? I don't get it? The article states Russia is the ONLY one supporting Venezuela.

In reply to Russia seems to go along… by greven40

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21st.century Thu, 03/29/2018 - 06:13 Permalink

Petroleum Vlad and Petroleum Maduro -- trying to barter with the same resource ? Venezuela is UN-able to even extract their own oil-- atrophying the knowledge on the alter of socialism ! it's good enough for both of them.

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roddy6667 21st.century Thu, 03/29/2018 - 06:27 Permalink

They could pump the oil, but it is so dirty than it costs more to refine than anybody is paying now.

In reply to Petroleum Vlad and Petroleum… by 21st.century

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