Venezuela to launch oil-backed cryptocurrency: Maduro

Venezuela plans to launch a cryptocurrency backed by oil reserves and gold in a bid to shore up its economy and overcome US-led financial sanctions.

“Venezuela will create a cryptocurrency” backed by oil, gas, gold and diamond reserves, the nation's president, Nicolas Maduro, said in his regular Sunday televised broadcast, Reuters reports.

The new digital currency, to be called "petro" will help Venezuela "advance in issues of monetary sovereignty, to make financial transactions and overcome the financial blockade," Maduro said.

The leftist leader offered few specifics about the currency launch or how the struggling OPEC member would pull off such a feat, but he declared to cheers that "the 21st century has arrived", the report said.

Opposition leaders in Venezuela derided the plan, which they said need congressional approval.

Some observers cast doubt on whether the digital currency would ever see the light of day in the midst of turmoil.

Venezuela's real currency, the bolivar, is in freefall, and the country is sorely lacking in basic needs like food and medicine.

Still, the announcement highlights how sanctions enacted this year by US President Donald Trump’s administration are hurting Venezuela’s ability to move money through international banks.

Washington has levied sanctions against Venezuelan officials, PDVSA executives and the country’s debt issuance.

According to Reuters sources, compliance departments have been scrutinizing transactions linked to Venezuela, which has slowed some bond payments and complicated certain oil exports.

Maduro's pivot away from the US dollar comes after the recent spectacular rise of bitcoin, which has been fueled by signs that the digital currency is slowly gaining traction in the mainstream investment world.

But the announcement bewildered some followers of cryptocurrencies, which typically are not backed by any government or central banks.

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