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Venezuela President unveils oil-backed crypto currency ‘petro'

Venezuela President unveils oil backed crypto currency petro'

Venezuelan President Nicolas Maduro has turned to the world of crypto currencies, announcing the launch of virtual currency “petro” backed by oil reserves.

In his regular Sunday televised broadcast, the president declared to cheers that “The 21st century has arrived! Venezuela will create a crypto currency to advance on the issues of monetary sovereignty, to make financial transactions and overcome the financial blockade.”

Maduro added that he is trying to fight out the US conspiracy to sabotage his government and end socialism in Latin America. He also declared that Venezuela is at a financial “world war.”

The crypto currency backed by oil, gas, gold and diamond reserves is expected to shore up the collapsed economy. The real currency of Venezuela, Venezuelan bolívar, has hit a new low. The currency has depreciated by 57 percent against the dollar in the last month alone. Poor price controls and excessive money printing have only resulted in black market growth. The economy is going through turmoil, sorely lacking even the basic needs like food and medicine.

Opposition leaders scrutinized the move and blamed the current financial disturbance on the ruling party’s poor track record in monetary policy. The leaders of the opposition called the digital currency ‘not credible’ and ‘no future’ currency. Compliance departments in the country too did not welcome the move.

The announcement underlines how sanctions enacted this year by the U.S. government have handicapped Venezuela’s ability to move money via international banks. The sanctions are levied against Venezuelan officials, Petróleos de Venezuela, S.A. (Petroleum of Venezuela) executives and the country’s debt issuance. The sources pinpoint the sanctions by the U.S. as the reason behind slow bond payments and complicated oil exports.

The digital currency has been gaining traction lately, courtesy the meteoric rise of Bitcoin, in the mainstream investment world with time. Ironically, Venezuela’s currency controls in past years have prompted a Bitcoin fad among Venezuelans looking to bypass restraints to obtain dollars or make purchases online.