Venezuelan President Considering Launch of Digital Currency
During the last couple of years, Venezuela has been facing numerous financial issues, due to the US-backed financial blockade being imposed on the country, for economic reasons. To help combat this blockade, the Venezuelan President, Nicolas Maduro, stated that the country will soon launch its very own cryptocurrency.
According to the President, Venezuela will create a digital currency, known as the petro, in order to allow financial transactions of all kinds to be carried out within the country, but also with other nations. The head of state believes that with the petro currency, financial transactions will overcome the financial blockade.
Reports indicate that the cryptocurrency will be a bit different compared to what we’re used to. With this in mind, it will be backed by the Venezuelan reserves of gas, gold, oil and diamonds. Following the announcement, Maduro did mention that ‘The 21st century has arrived’.
It is important to point out the fact that leaders of the opposition have stated that they’re against the proposal for now, and that it would need congressional approval prior to its creation and launch on the market. Reports indicate that many of the opposition parties believe that this currency will not see the light of day.
Regardless of whether the petro cryptocurrency is launched or not, the effort itself showcases that the US sanctions are truly hurting the country’s economy, as Venezuela finds it harder and harder to move money through international banks. Additionally, bond payments are also being complicated.
At this moment in time, Venezuela’s national currency is facing a freefall in terms of its value due to the numerous economic difficulties being faced by the country. The bolivar has depreciated with roughly 57% against the US dollar in the last month, thus leading the minimum wage to be of roughly $4.30 a month.
Based on everything that has been outlined so far, Venezuela isn’t the world’s first country to consider the launch of a government-backed digital currency. Yet, it might be one of the nations that need it the most.