The Venezuelan Petro was created as the first state cryptocurrency in order to receive international payments without having to use the Venezuelan fiat currency (Bolivar) or US dollars.
The Petro is a cryptocurrency backed by the Venezuelan oil, so in theory, it would be perfect using it just to buy this product.
India has a great need for oil because of its impressive economic growth that is increasing consumption, but it also has an iron law against cryptocurrencies that forbids the country to use them to make payments.
Indian Foreign Minister Sushma Swaraj said: “We cannot have any trade in cryptocurrency as it is banned by the Reserve Bank of India. We will see which medium we can use for trade.”
Therefore, the Indian government had to reject Venezuela’s offer that it would allow them to buy 30% discounted oil by paying in Petro.
In fact, at the end of April, the Venezuelan president Nicolas Maduro had proposed to India an agreement to supply the country with oil, but this agreement provided that purchases would be paid for with the Venezuelan state cryptocurrency.
Since India cannot legally use cryptocurrencies, it has lost the opportunity of paying almost a third less for the oil.
A month ago, the Central Bank of India banned all national institutions from using cryptocurrencies, with the aim of prohibiting both purchase and use.
Any agreement on the Petro cannot in any way be respected unless there is a change of heart by the Central Bank.