Venezuela to launch Petro cryptocurrency, backed by oil reserves

Venezuela has made a very interesting announcement these days. The country's president, Nicolas Maduro, stated that Venezuela will launch the Petro cryptocurrency, which will be backed by oil reserves.

This is considered to be a move by the country to avoid US financial sanctions and give a boost to Venezuela's economy, which has dealt with several issues, collapsing due to a huge debt.

Maduro stated that the cryptocurrency will function similar to bitcoin, but will be supported by Venezuela's oil, gas, gold and diamond reserves. The statement was made during a regular Sunday televised broadcast. According to Maduro:

“Venezuela will create a new cryptocurrency to advance in issues of monetary sovereignty, to make financial transactions and overcome the financial blockade.”

Maduro provided no other details on how and when the currency will be launched or which actions Venezuela plans to take to make this successful for the country. However, Maduro said that "the 21st century has arrived!"

Opposition leaders criticize new cryptocurrency plan

The announcement was received with skepticism by the opposition leaders, who claimed that the congress has to approve the plan.

Some have claimed that they did not expect the petro to actually be ever released given the country's financial problems. The Venezuelan currency, the bolivar, has experienced a new fall and the people are unable to access food and medicine, and fulfill their basic needs.

Opposition leaders also claimed that Maduro might be interested in using the new cryptocurrency with the main purpose to pay bondholders and foreign creditors and eventually restructure the country's debt burden. However, opposition leaders also claimed that this plan will most likely not succeed.

Maduro's interest in this market comes at a time when cryptocurrencies are dealing with a high success. Bitcoin had reached its highest value and managed to overpass the $11,000 price.