Published: Wed, December 06, 2017
World | By Melba Underwood

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

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

Venezuela will create its own cryptocurrency to "move forward on issues of monetary sovereignty, to carry out financial transactions and overcome financial blockade".

It will be called the Petro and be backed up by Venezuela's reserves of oil and gas and its gold and diamond holdings, the president said in his weekly television program. The real currency, the bolivar, is in freefall, and the country is sorely lacking in basic needs like food and medicine.

Opposition leaders blasted the announcement, saying it needed congressional approval, while others doubted it will ever see the light of day in an economy with a dim outlook on its horizon, Reuters reported.

Under the sanctions Washington imposed a ban on purchase of new Venezuelan debt securities by any person in the United States of America that prevents the restructuring of external debt of Caracas.

President Donald Trump declared Maduro's government a dictatorship when he announced financial sanctions against it in August.

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

Maduro's administration does not have a brilliant history in financial policy. As of Tuesday, it took 103,000 Bolivars to buy a USA dollar. This led the monthly minimum wage in the country down to a mere $4.3.

He could now be seeking to pay bondholders and foreign creditors in the currency amid a plan to restructure the country's major debt burden, opposition leaders said, but the plan is likely to flop. Reuters quoted lawmaker Angel Alvarado, who said that the idea has "no credibility".

Maduro views it as a fight against a Washington-backed conspiracy to sabotage his government and put an end to socialism in Latin America, and went as far as declaring a financial "world war".

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