Investing.com - Venezuela wants to create a digital currency to end their deepening financial crisis.
Venezuela’s economy has collapsed, the country is suffering under a financial blockade due to sanctions, and the value of their regular currency, the Bolivar, has plummeted.
Many tech-savvy Venezuelans have turned to Bitcoin as a safe-haven, but now Venezuelan President Nicolas Maduro is pitching an alternative, a cryptocurrency he would call the “Petro.” In a five-hour long Christmas television broadcast, Maduro said that the Petro would be backed by oil, gas, gold and diamond reserves.
The announcement confused many cryptocurrency followers, since digital coins are not typically backed by governments or central banks. With the Venezuelan government’s plan to control this new cryptocurrency, many feel that Venezuela might be about to get a second currency, just as dysfunctional as the first.
According to the unofficial exchange rate that most ordinary Venezuelans use the Bolivar has gone from 3,000 Bolivars to the dollar at the start of the year, to 103,000 bolivars today.
Opposition lawmakers feel the Petro currency would be doomed to fail as well, with Angel Alvarado telling Reuters “it’s Maduro being a clown. This has no credibility.