Recently, the Venezuelan government announced that it will create a cryptocurrency system, which it plans to call “the Petro”. The currency will be backed by Venezuelan oil reserves as well as other natural resources that are abundant in Venezuela. Likewise, Venezuelan President Maduro stated that it’s his hope that this will aid Venezuela in surviving with its abysmal national economy and the many United States enforced sanctions. Venezuelan President Maduro publicly announced the new program on his weekly national television program. Furthermore, he announced that it’s his hope that the currency will assist in Venezuela’s monetary sovereignty. As stated before the Petro will be backed by Venezuela’s strategic reserves of oil, gold, and diamonds. As a result, “the government hopes [it] will help it fight both sanctions and Venezuela’s high inflation rate” (NPR).
In addition, while attending a science and technology fair President Maduro stated that the new cryptocurrency will mean that Venezuela will have joined the 21st century at last by stating, that the cryptocurrency is “the next step of the technological evolution of humanity” (NPR) because it will ultimately mean that Venezuela and its many locals can do away with the institutions of banks and their bureaucracy and paper currency as well. Furthermore, the government of Venezuela is also launching the Blockchain Observatory, which will ultimately act as the institutional, political, and legal basis of the new currency. Moreover, this announcement has met both support and criticism from the international community. An example of the support comes from cryptocurrency expert Max Keiser, “Necessity is the mother of invention” in addition to this comment Keiser also states that he ultimately supports the Venezuelan initiative.
Additionally, however, there has been some backlash to the Venezuelan initiative as well. One such criticism is that questions remain on how exactly the government of Venezuela will roll the new initiative out and whether the Petro would be linked to already established and working cryptocurrencies such as the bitcoin or the Ethereum. Furthermore, Economists warn that this new currency may help hyperinflation thus aid in the unreasonable harm of locals who will continue to use the bolivar currency. Not only that but already Venezuela and its citizens are enduring soaring inflation along with shortages of many necessities thus protests have arisen.