Venezuela wants to launch a cryptocurrency backed by oil reserves called the “petro”

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nicolas maduro president venezuela
Venezuelan
President Nicolas Maduro speaks during the IV Gas Exporting
Countries Forum (GECF) Summit in Santa Cruz de la Sierra, Bolivia
on November 24, 2017.

AIZAR
RALDES/AFP/Getty Images


  • Venezuelan President Nicolas Maduro announced the
    launch of a cryptocurrency called the “petro” backed by oil
    reserves.
  •  Few specifics were given about the currency
    launch or how the struggling OPEC member would create the
    crytocurrency.
  • Maduro said the petro will help Venezuela recover
    financially after the US imposed sanctions. 


CARACAS (Reuters) – Venezuelan President Nicolas Maduro looked to
the world of digital currency to circumvent U.S.-led financial
sanctions, announcing on Sunday the launch of the “petro” backed
by oil reserves to shore up a collapsed economy.

The leftist leader offered few specifics about the currency
launch or how the struggling OPEC member would pull off such a
feat, but he declared to cheers that “the 21st century has
arrived!”

“Venezuela will create a cryptocurrency,” backed by oil, gas,
gold and diamond reserves, Maduro said in his regular Sunday
televised broadcast, a five-hour showcase of Christmas songs and
dancing.

The petro, he said, would help Venezuela “advance in issues of
monetary sovereignty, to make financial transactions and overcome
the financial blockade.”

Opposition leaders derided the announcement, which they said
needed congressional approval, and some cast doubt on whether the
digital currency would ever see the light of day in the midst of
turmoil. The real currency, the bolivar, is in freefall, and the
country is sorely lacking in basic needs like food and medicine.

Still, the announcement highlights how sanctions enacted this
year by U.S. President Donald Trump’s administration are hurting
Venezuela’s ability to move money through international banks.

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Washington has levied sanctions against Venezuelan officials,
PDVSA executives and the country’s debt issuance.

Sources say compliance departments are scrutinizing transactions
linked to Venezuela, which has slowed some bond payments and
complicated certain oil exports.

Maduro’s pivot away from the U.S. dollar comes after the recent
spectacular rise of bitcoin, which has been fueled by signs that
the digital currency is slowly gaining traction in the mainstream
investment world.

The announcement bewildered some followers of
cryptocurrencies, which typically are not backed by any
government or central banks. Ironically, Venezuela’s currency
controls in recent years have spurred a bitcoin fad among
tech-savvy Venezuelans looking to bypass controls to obtain
dollars or make internet purchases.

Get the latest Bitcoin price here.>>

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