Venezuela's Maduro, under pressure from USA sanctions, vows to launch cryptocurrency

Venezuela to launch oil-backed cryptocurrency to counter Washington's 'economic sabotage'

Venezuelan President Announces Oil-Backed Cryptocurrency “Petro” to Combat 'US Blockade'

In his regular Sunday (3 December) broadcast, Maduro said Venezuela will "create a cryptocurrency", backed by oil and natural gas reserves called the "petro" to shore up his country's collapsed economy.

He gave no details in his TV address about what the new currency's value will be, how it will work or when it will be launched.

Without offering specifics as to how or when the currency would launch, Maduro added it would help Venezuela "advance in issues of monetary sovereignty, to make financial transactions and overcome the financial blockade".

The announcement bewildered some followers of cryptocurrencies, which typically are not backed by any government or central banks. The irony is that currency restriction in Venezuela in the last few years have triggered a bitcoin craze among the tech-savvy citizens who are looking to evict controls and obtain dollars for making online purchases.

Opposition leaders in Venezuela, reportedly, have rejected his idea. It is an attempt to cope with a failing national economy and circumvent US sanctions.

The news comes as Venezuela faces acute financing problems after creditors and ratings agencies declared the government and the state-run oil firm PDVSA to be in partial default for missing interest and principal payments on bonds. Venezuela is now lacking in fundamental needs such as medicine and food.

Avowed Marxist and member of the constituent assembly Jesus Faria has called for changes to monetary policy that would lead to free global exchange. "This has no credibility", said opposition lawmaker and economist Angel Alvarado. In just one month, there has been a 57% depreciation in the bolivar vis-à-vis the dollar owing to uncontrolled money printing and currency restrictions. However, there is a high risk of the plan flopping.

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