President Nicolas Maduro has said Venezuela would launch a cryptocurrency to combat a US-led financial “blockade,” although he provided few clues about how the economically crippled Opec member would pull off the feat. Venezuela will create a cryptocurrency the ‘petro,’ to advance in issues of monetary sovereignty, to make financial transactions and overcome the financial blockade.
Opposition leaders scorned the announcement, which they said needed congressional approval, and some cast doubt on whether the digital currency would ever see the light of day in tumultuous Venezuela. The digital currency will be backed by Venezuelan reserves of gold, oil, gas, and diamonds, he said during the near five-hour show, which included traditional Christmas songs and dancing.
Cryptocurrencies typically are not backed by any government or central banks. Bitcoin already has a strong following among tech-savvy Venezuelans looking to bypass dysfunctional economic controls to obtain dollars or make internet purchases. For the millions of Venezuelans plunged into poverty and struggling to eat three meals a day, Maduro’s announcement is unlikely to bring any immediate relief.