Saturday, December 16, 2017

Reuters: Enter the 'Petro' - Venezuela to Launch Oil Backed Cryptocurrency

According to this article appearing in Reuters, it looks like Venezuela is going to attempt to launch "a cryptocurrency backed by oil, gas, gold and diamond reserves." The article notes that the leader of Venezuela (Maduro) "offered few specifics about the currency launch" or how Venezuela "would pull off such a feat". 

It is hard to tell at this point how significant this news may be. There are a number of questions that come to mind including if this cryptocurrency will be issued by a central bank (the first central bank digital currency?) and exactly how you back a currency with "reserves" still in the ground. Below are a couple of excerpts from the Reuters article.
"Venezuelan President Nicolas Maduro looked to the world of digital currency to circumvent U.S.-led financial sanctions, announcing on Sunday the launch of the “petro” backed by oil reserves to shore up a collapsed economy."

. . . . .

“Venezuela will create a cryptocurrency,” backed by oil, gas, gold and diamond reserves, Maduro said in his regular Sunday televised broadcast, a five-hour showcase of Christmas songs and dancing.

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