Venezulan leader Nicolas Maduro announced on state TV that Venezuela will create its own cryptocurrency. Maduro announced the “21st century has arrived!” as he introduced the public to his idea during his portion of a 5-hour state TV slot. The new cryptocurrency will be called the “Petro”. Venezuela plans to back their cryptocurrency with their substantial nature resources including oil, diamonds, and gold. The hope of the Venezuelan government is that this will allow them to skirt US sanctions and conduct business with the world.
The Venezuelan bolivar has lost a remarkable 57% of its value in the last month alone as it continues its slide into oblivion. Wealthier Venezuelans are now mining and using cryptocurrencies as an alternative. Will the government cryptocurrency solve the Venezuelan currency crisis? It is difficult to know but it seems unlikely a government managed cryptocurrency will be any more successful than a failed government-managed fiat currency. Will the Venezuelan government even be able to successful implement this “Petro” cryptocurrency in its current state of dysfunction? Time will tell.