Venezuela Introducing Cryptocurrency Supported by Diamonds, Gold, Gas, and Oil

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

Some were even doubtful about the new digital currency being launched at all since the country is dealing with a serious financial crisis.

Venezuela - a country laden with financial sanctions imposed by the US government is now in a state of deep financial crisis.

On Sunday, the President of Venezuela, Nicolas Maduro, made an announcement regarding the introduction of oil reserves-backed "petro" for reviving the collapsed economy.

"This will allow us to advance toward new forms of worldwide financing for the country's social and economic development", he added.

Opposition leaders in Venezuela said that the new cryptocurrency needed congressional approval, and some cast doubt on whether the it would ever see the light of day in the country.

The country is now lacking basic needs like food and medicine, and its currency, the bolivar, is in freefall as it went down 57 percent last month alone on black markets due to currency controls and excessive money printing.

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

Maduro blames his country's economic woes on a conspiracy to overthrow him combined with US economic sanctions, but he intends for a new petrocurrency to overcome those sanctions.

The announcement came as a surprise to some of the followers of cryptocurrencies, as conventional cryptocurrencies are not backed by governments 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.

Maduro's government has a poor track record in monetary policy. This led the monthly minimum wage in the country down to a mere $4.3.

Economists and opposition leaders say Maduro, a former bus driver and union leader, has recklessly refused to overhaul Venezuela's controls and stem the economic meltdown. Lawmaker Angel Avedro said that such announcement has "no credibility" and "It's Maduro being a clown".

"I see no future in this", added fellow opposition legislator Jose Guerra. On Sunday he said Venezuela was facing a financial "world war".

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