In what many say is a desperate bid to keep their heads above water, the Venezuelan government launched its new cryptocurrency today, the ‘petro’, backed by its oil reserves for value.
The socialist government of President Nicolas Maduro thinks that is has now found a way out of the western sanctions that are crippling the country, as analysts admit that a currency backed by the reserves of Venezuela’s oil, gas and diamond reserves combined with the world’s current enthusiasm for anything cryptocurrency related, could prove to be a way up for Venezuela’s battled official currency, the Bolivar.
The ‘petro’, President Maduro had declared in his Christmas televised broadcast, would help Venezuela “advance in issues of monetary sovereignty, to make financial transactions and overcome the financial blockade.”
At current oil prices of $59 dollar per barrel, the 100 million units of ‘petro’ which have been launched just now, would mean a market cap of $5.9bn for Venezuela and represent an investment that it desperately needs as the leftist government has lost all credibility on international markets already.
At the launch, the Venezuelan President declared: “I have ordered the emission of 100 million Petros with the legal sustenance of Venezuela’s certified and legalized oil wealth.”
“Every petro will be equal in value to Venezuela’s oil barrel."
There is no telling what this will mean for the impoverished population of the South American country itself of course. For example, the official exchange rate for the Bolivar in Venezuela’s central bank in Caracas is 10 bolivar per dollar, but on the black market is currently goes 137,000 bolivars per dollar.
According to South American commentators, prices for consumer goods have risen by 80% in December alone for most Venezuelans.