Venezuelan President Announces Oil-Backed Cryptocurrency "Petro" to Combat 'US Blockade'

Venezuelan President Announces Oil-Backed Cryptocurrency

"This will allow us to advance toward new forms of global financing for the country's social and economic development", he added.

The leftist leader offered few specifics about the currency launch or how the struggling OPEC member would pull off such a feat, but he declared to cheers that "the 21st century has arrived!"

During the broadcast, Maduro revealed that the cryptocurrency will be backed by commodity reserves including oil, diamonds, and gold.

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.

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.

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Maduro's pivot away from the US dollar comes at a time in which bitcoin's popularity surges as it reached a new all-time high above $11,800.

Venezuela will create its own cryptocurrency to "move forward on issues of monetary sovereignty, to carry out financial transactions and overcome financial blockade". 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. Hitherto cryptocurrencies have not been backed by any government or central bank.

"It's Maduro being a clown". Ironically, Venezuela's currency controls in recent years have spurred a bitcoin fad among tech-savvy Venezuelans looking to bypass controls to obtain dollars or make internet purchases.

According to opposition leaders and economists, Maduro, who was previously a union leader and bus driver, has carelessly refused to alter Venezuela's restrictions and curtail the severe economic meltdown. As of Tuesday, it took 103,000 Bolivars to buy a United States dollar. On Sunday he said Venezuela was facing a financial "world war".

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