Venezuela Plans a Cryptocurrency, Maduro Says

  • Venezuela Plans a Cryptocurrency, Maduro Says

Venezuela Plans a Cryptocurrency, Maduro Says

Venezuela has announced plans to launch a digital currency, "the petro", backed by the country's oil and mineral reserves. The Venezuelan president made the announcement during his weekly television program, broadcast on the state channel VTV.

"Venezuela will create a cryptocurrency", backed by oil, gas, gold and diamond reserves, Maduro said in his regular Sunday televised broadcast, a five-hour showcase of Christmas songs and dancing.

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".

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. They said that it still required an approval from the Congress.

Venezuela's real currency - the bolivar - is in freefall, with inflation running at 4,000% and the country running out of basic food and medicine. Venezuela is now lacking in fundamental needs such as medicine and food.

The U.S. had imposed sanctions against PDVSA executives, Venezuelan officials, and the country's debt issuance.

Reuters reports that compliance departments are scrutinizing transactions linked to Venezuela, which is in turn slowing down bond payments and thwarting oil exports. Rich supplies of resources provide some initial credibility to the proposal, but President Maduro's questionable track record when it comes to monetary policy is making many sceptical about the proposal. This growth outlined that the cryptocurrency is steadily gaining momentum in the mainstream investment world.

Certain cryptocurrency followers were confused and surprised by the announcement of the Venezuelan leader.

Though Maduro thinks that such measures would uplift his country's economy, opposition leaders have a different opinion altogether.