Venezuelan President Nicolas Maduro looked to the world of digital currency to circumvent U.S.-led financial sanctions, announcing on Sunday the launch of the "petro" backed by oil reserves to shore up a collapsed economy. Posted on 12/09/2017 6:40:17 PM PST by Bon mots
Venezuelan President Nicolas Maduro looked to the world of digital currency to circumvent U.S.-led financial sanctions, announcing on Sunday the launch of the "petro" backed by oil reserves to shore up a collapsed economy.
The leftist leader offered few specifics about the currency launch or how the struggling OPEC member would pull off such a feat, but he declared to cheers that "the 21st century has arrived!"
"Venezuela will create a cryptocurrency," backed by oil, gas, gold and diamond reserves, Maduro said in his regular Sunday televised broadcast, a five-hour showcase of Christmas songs and dancing.
The petro, he said, would help Venezuela "advance in issues of monetary sovereignty, to make financial transactions and overcome the financial blockade."
Opposition leaders derided the announcement, which they said needed congressional approval, and some cast doubt on whether the digital currency would ever see the light of day in the midst of turmoil. The real currency, the bolivar, is in freefall, and the country is sorely lacking in basic needs like food and medicine.
Still, the announcement highlights how sanctions enacted this year by President Donald Trump's administration are hurting Venezuela's ability to move money through international banks.
Washington has levied sanctions against Venezuelan officials, PDVSA executives and the country's debt issuance.
Sources say compliance departments are scrutinizing transactions linked to Venezuela, which has slowed some bond payments and complicated certain oil exports.
Maduro's pivot away from the U.S. dollar comes after the recent spectacular rise of bitcoin, which has been fueled by signs that the digital currency is slowly gaining traction in the mainstream investment world.
The announcement bewildered some followers of cryptocurrencies, which typically are not backed by any government or central banks. Ironically, Venezuela's currency controls in recent years have spurred a bitcoin fad among tech-savvy Venezuelans looking to bypass controls to obtain dollars or make internet purchases.
Maduro's government has a poor track record in monetary policy.
Currency controls and excessive money printing have led to a 57 percent depreciation of the bolivar against the dollar in the last month alone on the widely used black market. That has dragged down the monthly minimum wage to a mere $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.
Economists and opposition leaders say Maduro, a former bus driver and union leader, has recklessly refused to overhaul Venezuela's controls and stem the economic meltdown.
He could now be seeking to pay bondholders and foreign creditors in the currency amid a plan to restructure the country's major debt burden, opposition leaders said, but the plan is likely to flop.
"It's Maduro being a clown. This has no credibility," opposition lawmaker and economist Angel Alvarado told Reuters.
"I see no future in this," added fellow opposition legislator Jose Guerra.
Maduro says he is trying to combat a Washington-backed conspiracy to sabotage his government and end socialism in Latin America. On Sunday he said Venezuela was facing a financial "world war."
Or put Maduro's picture on it and call it TWITCOIN.
There is no way for him to make much money on an ICO, however, the Venezuelan Communists have resorted to outright theft any time they have been able to get their hands on the assets of foreigners.
Their last big larceny was in 2010, when they stole 11 oil rigs from Helmerich and Payne of Oklahoma and stole another 6 from Chevron.
They called it, 'Nationalization'.
Expect to lose every penny you put into Maduro's $hitcoin.
Except that they will produce nothing to back it up. But then, isn’t that what the Bitcoin is?
He will fleece idiots. The people will still starve. His family will stash millions or billions and then flee the country.
Perhaps Vz should go back to shipping Lagovan asphalt to the US. It was a real money earner...
If you were starving, would you rather have food or the gold that Scrooge McDuck swims in.
Why would anyone trust Maduro?
He has been instrumental in breaking numerous legal contracts. He has no record of following the rule of law, or intending to.
Perhaps many U.S. Progressives will buy in. He is their kind of guy.
I want me some Venezuelan bitcoin. I want it bad.
oops! I forgot the /S
I would not trust this guy in an empty basement, neither is his word any good as with most socialists, as well as with many republicans. The say one thing but mean something else. At least with our current President you know pretty well where you stand. May the good Lord guide and protect him.
LMAO !!
you owe me a keyboard!
I wouldn’t trust him in an outhouse with a muzzle on. Nothings safe but a red hot stove.
Even Zimbabwe laughs at this.
If Alaska was issuing this crypto currency, I would sit up and take notice.
But collapsing communist craphole Venezuela? I’ll pass.
I don’t know about that but I’d like a petro. Sounds cool.
This is not serious.
Maduro just burned Exxon for $1.4 billion like 6 months ago.
On the other hand, the concept of rogue nations avoiding sanctions with crypto currency is a thrilling and bountiful movie concept.
In my mind's eye, I can instantly see a cast of rogue actors hacking into a Bitcoin exchange - a “virtual” Swiss bank account - and stealing billions of untraceable dollars from an international tyrant.
Where is the tech whitepaper? The ICO website? Vaporware fail!
Is it a problem backing a currency with stuff that's still in the ground, when their principal problem is an inability to get anything salable out of the ground? Especially when 60 billion or so is already promised to the Chinese? Heck no! I'll be dripping in Venezuelan diamonds soon. The IPO packet even included a shovel. What could possibly go wrong?
I love this idea, I’m 100% in...
Sean Penn
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.