Socialist bitcoin? Venezuela SHOCKS economists with world’s FIRST national cryptocurrency

Monday, January 8, 2018
By Paul Martin

VENEZUELA has launched a brand-new cryptocurrency today – nicknamed the ‘petro’ – which will be backed by the country’s deep oil reserves.

Mon, Jan 8, 2018

Venezuelan President Nicolas Maduro ordered 100 million units of a new national cryptocurrency called the ‘petro’ which will be backed by the country’s oil.

The cryptocurrency is the world’s first to be backed by a country’s physical assets and will be valued at the price of a barrel of oil, around £45.

The pioneering move is believed to be an attempt to bypass US-imposed financial sanctions, amid a spiralling financial crisis in the socialist country.

Local economic consultancy Ecoanalitica said prices rose more than 80 percent in December alone, while Venezuelans suffer from sky-high inflation and food shortages.

Mr Maduro said the petro will help the oil-rich state beat the “tyranny of the US dollar”.

The socialist leader told a televised address: “I have ordered the release of 100 million petro with the legal sustenance of Venezuela’s certified and legalized oil wealth.”

He said the petro would be supported by one of several fields of the so-called Orinoco oil belt, a vast reservoir of heavy crude in the east of the country.

Venezuela has yet to reveal what technology or protocol the currency uses – such as Ethereum – but an announcement will be made on January 14th.

However, investors are so far remained on the sidelines, citing a lack of confidence in Mr Maduro’s socialist government, which last month was forced to restructure its foreign debt.

Michelle Caruso-Cabrera, a CNBC correspondent, claimed that financial experts had doubts whether the currency will work in Venezuela.

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