Recently, Venezuela has been hit with an array of different problems such as their massive hyperinflation and multiple waves of U.S. sanctions. The Venezuelan president, Nicolas Maduro, appeared on his weekly television series “Los Domingos con Maduro” (Sundays with Maduro) to announce the cryptocurrency.
The value of the cryptocurrency will be based on Venezuela’s massive reserves of oil and gas, as well as its array of gold and other minerals. The president states that the purpose of the cryptocurrency is to “advance the country’s monetary sovereignty, to carry out financial transactions and to defeat the financial blockade against the country.” Maduro believes the cryptocurrency help to “move toward new forms of international financing for the economic and social development of the country.”
“We are facing a financial war against the country which we have denounced and the opposition has denied. There are businesspeople who are unaffected by Donald Trump‘s blockade. With this, we will join the 21st century,” Maduro added, as cited by Panorama.
The government has decided to establish a BlockchainBase observatory to watch over the development and release of the ‘Petro.’
A cryptocurrency expert named Max Keiser responded to the news by saying, “Necessity is the mother of invention.” He followed that tweet by saying, “As a crypto and digital currency pioneer and inventor, I support this initiative and encourage others to do same.”
Maduro believes this cryptocurrency will save the hyperinflation problems Venezuela is facing. Due to the wave of sanctions the U.S. is putting forth, the bolivar has received a 57% devaluation against the dollar in the last month alone on the widely used Venezuelan black market. Due to the bolivar dropping in value, the monthly minimum wage for citizens in Venezuela now lowered to a mere $4.30.
President Maduro said on Sunday that Venezuela was facing a financial “world war.” The question that should be asked is, “Could this cryptocurrency save Venezuela’s economy?” We will find out the results and the effect of the new currency on the economy soon when it is released.