Venezuelan President Announces Superintendence of Its Oil-Backed Cryptocurrency ‘Petro’

As covered by CCN, Venezuelan President Nicolas Maduro recently announced the creation of a new cryptocurrency during a Christmas television special. The new cryptocurrency, dubbed “petro” will be backed by commodity reserves, including oil, diamonds, and gold. Per the Venezuelan leader, it will help overcome the country’s “financial blockade.”

At the time, opposition leaders made it clear they don’t believe the cryptocurrency is going to solve the country’s economic problems, and even wondered if it would see the light of day, taking into account Venezuela has been ravaged by a crisis that forced millions of people to struggle for survival, and that the commodity-backed cryptocurrency is unlikely to bring them any immediate relief.

Nevertheless, according to local publication VTV, the Venezuelan leader is seemingly carrying out his plan as he recently announced the setting up of a body that will govern the cryptocurrency’s transactions.

Per the publication, during a public ceremony Maduro stated (roughly translated):

“I announce the creation of the Superintendence of the Venezuelan Cryptocurrency and its relationship with the world, I create a special superintendence to govern the direction of Petro from Venezuela and the world.”

During his speech, Maduro revealed that former President Hugo Chávez explained to him the idea of a currency backed by oil reserves on several occasions, but added that at the time leaders with a “closed and obtuse mentality” opposed its creation.

The Venezuelan leader further revealed that now no one opposes the petro, and that it’s now going to become a reality, as it will be a Venezuelan cryptocurrency. He further stated that he believes this is a step towards a better future, and that 2018 will be the year in which the cryptocurrency, and the country’s economy, take off.

Maduro further appointed Carlos Vargas, a member of the Constituent Assembly, as the head of the superintendence. He added:

“We are opening the doors to modernity, Venezuela once again becomes the showcase of the world. That dream of Commander Chávez, we are going to materialize it and we are going to turn it into the first cryptocurrency backed by the Venezuelan oil reserves, certified internationally.”

Notably, Venezuela is a country in which cryptocurrencies like bitcoin and dash have helped the people circumvent government restrictions to buy goods from abroad. The country’s authorities have in the past cracked down on cryptocurrencies, as its state-owned internet service provider, CANTV, blocked bitcoin-related websites and mining pools, while the country’s biggest exchange, SurBitcoin, was forced to temporarily shut down operations after Banesco bank closed its account, among others.

Regarding the petro, economists and opposition leaders say Maduro may be looking to pay foreign creditors in the cryptocurrency and plan to restructure the country’s major debt burden, a move that won’t help its people. Despite criticism, the Venezuelan leader sees it as a fight against a Washington-backed conspiracy that’s looking to sabotage his government, and put an end to socialism in Latin America.