Venezuelan President Niclas Maduro unveils a decree detailing the launch of El Petro cryptocurrency.
Venezuelan President Nicolas Maduro has formally unveiled a decree detailing the launch of the country’s cryptocurrency called the El Petro, backed by the nation’s natural reserve, including oil, gold, and diamond.
“Here’s the document formalizing the provision of the certified Ayacucho oil field No.1 in the Orinoco Petroleum Belt for the support of El Petro cryptocurrency,” Maduro said on national TV over the weekend.
The reserve has nearly five billions of barrels of oil and Maduro backed the document with an “international certificate”.
Until now, informally, Venezuela used cryptocurrencies such as Bitcoin, Litecoin, and even DogeCoin, to mitigate the effects of hyperinflation:
Due to hyperinflation, the Govt of Venezuela has raised the minimum monthly salary to the equivalent of $7.50 USD.
This is why Bitcoin is important. Not paying for your damn coffee.
— Whalepool (@whalepool) January 2, 2018
The Venezuelan government also pledged to provide cryptocurrency mining across the country. Maduro stated:
“Every single Petro will be backed by a barrel of oil. We will set up a special team of cryptocurrency specialists so they will be engaged in mining in all states and municipalities of our country.”
Gold And Diamond to Back El Petro
In addition to oil, Maduro also directed the allocation of the gold and diamond deposits from the Arco Minero and Orinoco Belt to further boost the value of El Petro.
The Venezuela leader has already activated the Cryptocurrency Superintendency and the National Blockchain Observatory to oversee the creation and operation of El Petro.
Launch of El Petro Imminent
Before the turn of the year, Venezuela’s communications minister hinted the imminent launch of the asset-backed El Petro, which he claimed will peg from the country’s 5.3 billion barrels of oil reserve, or equivalent to nearly $267 billion.
“Camp one of the Ayacucho block will form the initial backing of this cryptocurrency.” The Ayacucho block is located within the southern Orinoco Belt, which was earmarked by Maduro as one of Venezuela’s assets to back the national cryptocurrency.
Cryptocurrency To Save Ailing Venezuelan Economy
Maduro first announced his plans to launch the country’s national cryptocurrency in early December in his bid to save the nation’s crippled economy.
The sharp drop in oil prices in recent years has left Venezuela’s economy in shambles. Further aggravating Venezuela’s woe is the decline in its currency, the Bolivar.
But Maduro has turned to cryptocurrency to keep the economy afloat and “to innovate toward new forms of international finance for the economic and social development of the country.”
Pegging El Petro to Venezuela’s vast natural resources was his way “to advance the country’s monetary sovereignty, to carry out financial transactions and to defeat the financial blockade against the country.”