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Venezuela launches oil-backed cryptocurrency

Monday, December 04, 2017 - 01:51

Venezuela's President is looking to the world of digital currency to circumvent U.S.-led financial sanctions, announcing the launch of the ''petro'' backed by oil reserves to shore up a collapsed economy. But, as Silvia Antonioli reports, Nicolas Maduro offered few specifics about the currency launch or how the struggling OPEC member would pull off such a feat.

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The cryptocurrency hype has found an unlikely supporter... While bitcoin traded comfortably above the 11,000 mark Venezuela's President, Nicolas Maduro announced the launch of the country's very own cryptocurrency, the Petro. In front of a somewhat skeptical audience... UPSOT- "El Petro se va a llamare. El san Petro." Unlike Bitcoin, which has no central bank or commodity backing Maduro said the Petro would be supported by the country's rich reserves of oil and minerals. And its creation has a very specific aim. (SOUNDBITE) (Spanish) PRESIDENT NICOLAS MADURO, SAYING: "Venezuela will create a new cryptocurrency, the Petro, so as to advance in issues of monetary sovereignty, to make financial transactions, to overcome the financial blockade. This is going to allow for advancements in international financing for the economic and social development of the country." The Venezuelan economy is collapsing under the weight of a huge debt, rampant inflation and more recently, U.S. sanctions. As millions struggle to get food and drugs, the opposition derided Maduro's creative approach and some others think the cryptocurrency will do little to help. SOUNDBITE (English) Commerzbank, Global Financial Economist, Peter Dixon: "It does strike me at least as a little bit of desperation...I think crypto currencies certainly have a future and I certainly think that they have a future when it comes to being owned and managed by central governments or central banks. But I'm not sure that necessarily Venezuela is going to be a good example of a country which is able to manage and to persuade the rest of the international community that this is the way forward." It may not help many impoverished Venezuelans though And with inflation close to 900 percent this year buying food remains a struggle