Few countries can identify with the grief that Venezuela has gone through over the past few years. Sanctions placed on them by the U.S. and high debt has nearly crippled the country. All isn’t over yet. Seems Venezuela is finding hopes for a thriving economy in cryptocurrencies. Nicolas Maduro, the country’s president has just come out with the news that they will soon be launching their own cryptocurrency called Petro.
According to Maduro, the cryptocurrency will launch in a matter of days. The country will use their oil, gold, gas and diamond reserves to help the cryptocurrency move along and advance in issues of monetary sovereignty. This cryptocurrency will allow Venezuela to make financial transactions while avoiding their financial blockade.
The country has an oil reserve of 5 million barrels and that adds up to $267 billion worth of finances. That said, President Maduro has already signed 860,800 people to his ministry that will assist the country in mining for cryptocurrency. Taking all that into consideration, will cryptocurrency help Venezuela escape from their financial woes? Steve Hanke of Forbes thinks that it won’t do much in terms of saving the country. “The only way for a currency issued by Venezuela to garner any trust would be for the currency to have an iron-clad redemption feature,” he further stated. “Forget the commodity backing promise. It wouldn’t be worth the paper it was written on.”
Most have held beliefs likewise to Steve Hanke. Upon hearing President Maduro’s announcement, reactions have been mostly ridicule and disbelief. Even parties within the country are questioning the capability of this new cryptocurrency. So far it has failed to suspend the beliefs of many. Depending on cryptocurrency to pull the country out of economic woe is wishful thinking. That said, there are a number of other countries hoping to launch their own cryptocurrencies, amongst them are nations like Russia.