Petro Cryptocurrency Backed by State Reserves
Nicolas Maduro, the President of Venezuela, has said that Venezuela will be launching the Petro cryptocurrency in the next few days. Earlier this month, the president stated, “every single Petro will be backed by a barrel of oil… and gold”. The president also confirmed that the petro cryptocurrency will be backed by the country’s gas and diamond reserves. Speaking at a press conference, which was broadcasted on national television, Information Minister Jorge Rodriguez said, “It is a matter of days before we announce the first issuance of the petro cryptocurrency”.
Venezuela’s petro cryptocurrency will be backed by over 5 billion barrels of oil. This equates to roughly $267 billion in value. With the launch of this state-backed digital currency, President Maduro intends to improve Venezuela’s current economic condition. Furthermore, the president plans to overcome the financial blockade against Venezuela by facilitating the mining of the cryptocurrency throughout the country. A group of crypto experts will work throughout the country to mine this new cryptocurrency. Already, cryptocurrency mining in Venezuela has become very popular over the last few years.
Strong Disapproval from Members of the Opposition
The Venezuelan bolivar has become almost useless. The country introduced a 100,000 bolivar note due to a staggering 4,000% inflation. 100,000 bolivars are still worth just around $1.00. When Maduro first announced plans to create the cryptocurrency earlier this month, opposition members were quick to mock and criticize the president. According to opposition member, Angel Alvarado, “It’s Maduro being a clown. This has no credibility”.
Despite the heavy criticism and skepticism from the opposition, Maduro released a document that is supposed confirm, through an “international certificate”, that Venezuela actually has 5 billion barrels of oil that will back its new petro cryptocurrency. The Venezuelan government clarified that its cryptocurrency will not be like bitcoin or other cryptocurrencies because it will be backed by the state’s reserves of oil, gas and even diamonds and gold.
Petro Cryptocurrency Provides Hope for Venezuela
The International Monetary Fund (IMF) predicts that the Venezuelan economy will continue to suffer and inflation rates will also continue to rise in 2018. Given this bleak forecast, the Venezuelan government is hoping that petro cryptocurrency will help Venezuela’s economy recover from the US-led financial blockade. Maduro thinks that by using the new cryptocurrency, international suppliers will resume business with the country that is plagued by seemingly insurmountable debt.
Venezuela’s population of over 31 million has now been subjected to several years of crippling recession. The country’s government points the finger mainly at the US and other members of the international community for its problems. However, the government’s critics blame the country’s crisis on widespread corruption and bogus government policies.
It’s Always the Innocent Who Suffer
Venezuela’s Information Minister, Jorge Rodriguez, thinks that the world’s “dictatorial financial centers” will not be able to stop Venezuela’s petro cryptocurrency from helping to lift the country out of economic ruins. Ultimately, whenever a country is hit with international financial or political sanctions, the innocent people of the country are the ones who suffer. Why should millions of innocent people live in misery simply because world governments can’t amicably resolve their matters? Not just Venezuela, but many third-world countries have turned to bitcoin and other cryptocurrencies for relief from economic collapse. Can cryptocurrencies save them?