A stuck head of state, nearly at payment default, officially announces the creation of his own cryptocurrency.
“I am announcing that Venezuela will set up a new cryptocurrency system based on its oil reserves. Venezuela will create a cryptocurrency, the Petro, to make progress on monetary sovereignty, to carry out its financial transactions despite the financial blockade.”
This explosive announcement by President Maduro in person on a TV show hits Venezuelans with surprise and the Trump administration in the thick of it.
A bold strategy that aims to circumvent the financial embargo, imposed by the United States.
And counterbalance the effects of the local currency depreciation (bolivar) by offering a credible alternative.
Black gold legitimizes virtual gold.
This cryptocurrency will be endorsed by the country’s natural reserves, including oil, gas, diamonds and many other riches that abound in the Venezuelan subsoil. In return, it will facilitate an easier and more efficient raw materials exportation, and oil above all, which is currently hampered by the US financial blockade.
The socialist president is determined through the Petro to recover his monetary sovereignty.
He accuses the Washington administration of willing to terminate socialism in Latin America.
After declaring last September, that Donald Trump was the new Hitler, he attacks him this time on the field of financial circuit.
Venezuela faces an unprecedented net indebtedness. This debt estimated at nearly $ 150 billion, was caused by the decline in oil prices. With a poorly diversified economy, mainly based on oil currencies, Venezuela is in stuck in a difficult period. The country, for lack of motto, can no longer assume its sovereign role and provide the staple foods and medicines to its people. Very serious consequences that affect the people. In addition, this country and the state oil company PDVSA are experiencing partial payment default
Will the new cryptocurrency – Petro – emerge?
Despite President’s confidence, he will not be able to create this cryptocurrency alone and the opposition is currently very reluctant to this vision. Actually, this latter is clown-insulting Maduro, and recalls his past as a bus driver and trade unionist, in order to discredit his action.
Yet this project is rooted in a socio-cultural context torn by an increasing and unbearable inflation for the population that tends to turn, since the end of 2016, towards Bitcoin at the expense of the national currency.
Bitcoin hold an appealing virtue to a growing Venezuelans minority, of being free from any banking or government control, hence offering a safe alternative. In addition, this alternative smiled with a course that exploded to reach $ 11,000.
Will the new cryptocurrency come into being, and under which condition?
For the moment no detail on the operational modalities has been revealed.
No official launch date, no technical aspect was mentioned. It should be noted that the accomplishment of such a feat will depend on the congress approval.