New Cryptocurrency “Petro” Announced by Venezuelan President

Venezuelan President Announces Petro – A New Oil-Backed Cryptocurrency

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Nicolas Maduro, the Venezuelan president has recently announced a new cryptocurrency during a Christmas television special, amidst the present economic crisis that the country is facing and the fall in value of the Venezuelan Bolivar’s – according to Reuters.

Nicolas was a former bus driver and union leader who assume office in 2013. He hasn’t reveal a lot yet about proposed new cryptocurrency named “Petro,” or how the country would go about developing and distributing it but he did declare that “the 21st century has arrived!”

During the broadcast, the president revealed that the new cryptocurrency will be backed by commodity reserves, which include oil, gold, and diamonds. According to him, “Petro” will help Venezuela to overcome the country’s financial “blockade.” A statement published on the government’s website reads (rough translation):

“Venezuela will create a…cryptocurrency to advance monetary sovereignty, as it will help to overcome the financial blockade and thus move towards new forms of international financing for the economic and social development of the country.”

The announcement shows how sanctions enacted by U.S. President Donald Trump’s administration this year hurt the country’s ability to move money through the international banking system. Venezuela, as covered by CCN, has been ravaged by economic problems caused by hyperinflation and government failures.

The country is currently lacking basic amenities such as food and medicine, and its currency, the bolivar, is in freefall as it went down 57% last month alone on black markets due to currency controls and excessive money printing. This led the monthly minimum wage in the country down to a mere $4.3.

Reports from Reuters showed that compliance departments are scrutinizing transactions linked to Venezuela, which is in turn slowing down bond payments and thwarting oil exports. According to CCN, the country’s problems has forced a lot of people within the country to depend on bitcoin and other cryptocurrencies to survive, even neither Western Union nor PayPal work there.

The Petro May Not Bring People Immediate Relief

Maduro’s pivot away from the U.S. dollar comes at a time in which bitcoin’s popularity surges as it reached a new all-time high above $11,800. However, opposition leaders in Venezuela aren’t convinced it’ll solve the country’s problems, as they say the petro needs congressional approval, and some have cast doubt on whether it will ever see the light of day, taking into account the country’s situation.

As stated by Andreas Antonopoulos:

Maduro views Petro 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.”

“Venezuela is currently struggling with economic crises and “blockade” from the US government, which has made living difficult s its currency drops in value. Venezuelans has turned to cryptocurrency for solace and this has made the Venezuelan president, Nicolas Maduro, to announce the launching of a new cryptocurrency “Petro”. Embracing and adopting this digital currency by the citizen could possibly curb the economic crises the nation is currently undergoing, which will translate to a better life for them as well as Combat ‘US Blockade’ to enable free flow of international transactions.”

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