Venezuela May Launch its National Oil-Backed Cryptocurrency04.12.2017

Venezuela will create its own cryptocurrency, which is to be backed by its reserves of oil, gas, gold, and diamonds, said President Nicholas Maduro. Speaking at a national television, he said that the creation of such a digital currency would allow Venezuela “to advance in matters of currency sovereignty, to conduct its financial operations and defeat the financial blockade.” The real Venezuelan currency, Bolivar, is now in free fall, and the country is experiencing an acute shortage of basic goods, such as food and medicine.

As reported by Bloomberg, the Venezuelan cryptocurrency will be called “El Petro” or simply “petro.”

The Venezuelan opposition called the speech of Maduro a joke and said that his words are not trustworthy. They are sure that Petro had no future.

The statement was made against the backdrop of the continuing collapse of the value of the national currency. As a result of the sharp drop in the Bolivar, the minimum wage in Venezuela, converted to hard currency, is only $ 4.30 per month.

According to the estimates of the International Monetary Fund, Venezuelan GDP will decrease by 12% in 2017, and next year inflation in the country will exceed 2,300%.

Meanwhile, the President stressed how the sanctions imposed this year by the administration of the US President Donald Trump violate Venezuela's ability to transfer money to international banks.

Washington imposed sanctions against Venezuelan officials, PDVSA executives, and the country's debt bonds.

The announcement has puzzled some adherents of cryptocurrencies, which are usually not supported by either the government or the central banks. Ironically, the currency control of Venezuela in recent years has spurred the addiction to Bitcoin among high-tech Venezuelans trying to circumvent the existing control measures to get dollars or make purchases over the Internet.