In protest of what Venezuelan President Nicolás Maduro called a financial “blockade” by the United States and the Trump administration, the government of Venezuela will be launching a cryptocurrency of its own.
Called the “petro,” the new currency will be backed by the OPEC nation’s oil, gold and mineral reserves, according to Maduro.
“This will allow us to advance toward new forms of international financing for the economic and social development of our country,” Maduro told his citizens in his weekly Sunday televised broadcast. The rest of the five-hour broadcast was dedicated to Christmas songs and dancing.
The petro, he said, will help Venezuela “advance in issues of monetary sovereignty to make financial transactions and overcome the financial blockade.”
The move was less than universally beloved — opposition leaders pointed out that to do this, Maduro would need congressional approval he is never going to get, given the perpetual strife and discord in the government of the hyperinflation-racked country.
Venezuela’s real currency, the bolivar, is in free fall, a situation that has left citizens unable to purchase staples like food or medication.
But the cryptocurrency push highlights the degree to which sanctions by the U.S. government put in place earlier this year have further damaged the already-weak government’s ability to move funds through international banks.
Maduro’s move away from the dollar has additionally been pushed by the meteoric rise of bitcoin, which has been fueled by signs that the digital currency is slowly gaining traction in the mainstream investment world.
But there are questions about whether the Maduro government can do any better with cryptocurrency than it has with regular currency. Currency controls and excessive money printing have lead to a crash in the value of the bolivar against the dollar — which in turn has dragged down the monthly minimum wage to a mere $4.30. It is not obvious how the crypto announcement will immediately help the millions of citizens who have fallen into poverty and are finding it difficult to come by regular necessities.
“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 fighting a D.C.-lead conspiracy to sabotage his government and end socialism in Latin America.