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

President of Venezuela announced the creation of a cryptocurrency

President of Venezuela announced the creation of a cryptocurrency"Petro

CARACAS – Venezuelan President Nicolas Maduro announced on Sunday the creation of the Petro, a cryptocurrency “to move forward in the area of monetary sovereignty, to make financial transactions and to defeat the financial blockade.”.

President Maduro provided few details about the currency launch, and how he plans to revive the economic situation of his country.

Venezuelan President Nicolas Maduro also stated that he would like to begin trade with Russian Federation in the Rouble.

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

Maduro says this new currency will help Venezuela bypass the sanctions that the United States has imposed. Compliance departments in the US have been scrutinizing transactions related to Venezuela.

Maduro's pivot away from the US dollar comes after the recent spectacular rise of bitcoin BTC=BTSP, which has been fuelled by signs that the digital currency is slowly gaining traction in the mainstream investment world. According to the statement published on the government's official website, the state-owned cryptocurrency would help Venezuela the financial "blockade".

This picture taken on October 17, 2017 shows Venezuelan President Nicolas Maduro speaking during a press conference with worldwide media correspondents at Miraflores Presidential Palace in Caracas on October 17, 2017.

Bitcoin already has a strong following among tech-savvy Venezuelans looking to bypass dysfunctional economic controls to obtain dollars or make internet purchases. As a result, the minimum wage per month has dropped to a meager $4.30.

For the millions of Venezuelans plunged into poverty and struggling to eat three meals a day, Maduro's announcement is unlikely to bring any immediate relief. Lawmaker Angel Avedro said that such announcement has "no credibility" and "It's Maduro being a clown".

Jesus Faria, a self-proclaimed Marxist economist and a former trade minister who's now a member of the constituent assembly, recently said about the current foreign-exchange policy that a "truly free exchange market has to be established, where supply and demand meet to fix the price".

Maduro says he is trying to combat a Washington-backed conspiracy to sabotage his government and end socialism in Latin America.

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