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Coinsecure, Venezuela and Petro – A Look At the Facts

By now the news must have already reached your ears, 30% discount on oil if Government purchases using Petro cryptocurrency from Venezuela. Well, if you still don’t know what it means, let me explain. In an article published by Business Standard, sources say, Venezuela is ready to sell oil to India at 30% discount, but only if it is purchased using Petro, Venezuela’s oil-backed cryptocurrency.

Petro is world’s first state-backed cryptocurrency and is considered to remain stable in pricing as it backed by oil reserves of Venezuela. The country has the largest oil reserves as of date – 300 Billion Barrels. The article also mentioned an Indian Exchange and its deal with the South American nation.

Venezuela signed a deal with India’s CoinSecure exchange to add Petro on their exchange to be traded with Bitcoin and INR.

30% discount on oil, is a very saleable headline. Unfortunately the article focused more on Coinsecure deal, rather than the feasibility of oil discounts. At this point, Coinsecure is shut, thanks to a massive loss of 438 Bitcoins. But we will get to that later.

Facts regarding Petro, Venezuela and India’s oil imports

  • India is on the verge of doubling imports from Iran because Iran is giving freight discounts on higher imports. Source
  • Venezuela’s oil production is dropping. They have the highest reserves, but drop in oil production means they cannot keep up with the demand if need be.
  • Venezuela’s Petro is under US sanctions. This means buying Petro and then buying oil using Petro can jeopardise the Indo-American ties.
  • The South American country is a member of OPEC (Organization of the Petroleum Exporting Countries). The OPEC specifically run by Russia and Saudi Arabia has managed to increase the price of Oil worldwide. How? By Curbing production and letting the demand increase. OPEC will not allow Venezuela to sell at 30%, or rather any discounts. OPEC is considered a cartel by many, that keeps making profit off of oil prices. Source

Considering all of these, I see no way we are getting discount on oil purchases from Venezuela. Even Iran is giving freight discount, not oil discounts.

Now a few facts about Coinsecure and the deal

  • The deal in question with Venezuela was struck in March.
  • Coinsecure will be the exclusive and official exchange in Venezuela for trading cryptocurrency with Petro.
  • Coinsecure was hacked/attacked on 9th April and lost 438 Bitcoins. They are working with authorities to recover stolen Bitcoins as of now.

I really do not understand how no one asked, “Coinsecure is hacked, how will they launch?”, before publishing the article.

We contacted Coinsecure to straighten things up a bit and received a reply straight from the horse’s mouth. Regarding the launch of an exchange, CEO of CoinSecure, Mohit Kalra replied to Coin Crunch India,

Now, we are building the exchange again. One for Coinsecure and other one for Venezuela. We are gonna be launching way stronger this time. With multiple crypto markets & multi signature crypto holdings.

Kalra added that in India Petro will be listed as tradeable pair, but for Venezuela there will be a full official market of Petro based trading.

The launch will take place in another 60-75 days.

Coinsecure is gearing up for a relaunch but is yet to compensate the customers who lost their funds. According to the official statement, “There will be new contracts rolled out to all users who held a balance on Coinsecure”.

Venezuela is in dire need of an economic reform. Petro could be a game changer for them. Despite the US sanctions, sources say that Petro collected $3.5 Billion in the pre-sale and have registrations from 127 countries. However, giving discounts on oil prices does not look like a viable prospect, not in India atleast. The truth is, in situations as these, only time can tell what can happen next.

Will there be a discount on Oil Prices? What do you think? Let us know in the comments below

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