Venezuela Set to Launch Its Own Oil-Backed Cryptocurrency

Crypto by Oil

According to the Venezuelan government, the country's cryptocurrency will launch within the next few days and will be backed by 5.3 billion barrels of oil worth $267 billion. If it seems like a drastic and sudden move, consider those dire circumstances often call for dramatic action. Venezuela is currently in the midst of an overwhelming financial crisis, which the government hopes that this move will offset. However, the adoption of cryptocurrency is by no means a surefire method and the launch of the "petro" cryptocurrency was only just announced earlier in December.

Beyond oil, the crypto will additionally be backed by Venezuela's oil, gas, gold, and diamond reserves. While the move has been referred to as a "hail mary" stunt by some, the country's Communications Minister Jorge Rodriguez is confident that the currency will successfully launch within a couple of days.

Referring to the part of Venezuela's southern Orinoco Belt, Rodriguez stated that "Camp one of the Ayacucho block will form the initial backing of this cryptocurrency. It contains 5.342 billion certified barrels of oil. We're talking about backing of $267 billion." Rodriguez added that the miners have already lined up, though no further explanation or details were provided.

 

Financial Crisis

Venezuela is in a severe financial crisis, and while the government hopes crypto could help offset the major crash the country's currency has experienced, there are also hopes that this might allow them to pay international providers who have stopped supplying to Venezuela.

If that turns out to be the case, the people of Venezuela could theoretically benefit. Currently, 30 million citizens of Venezuela are facing shortages, unattainable prices for basic necessities, and other conditions that put lives at risk.

The President of Venezuela, Nicolás Maduro Moros, has said that U.S. policies have pressured the country into its current position. Regarding that matter, Rodriguez stated that as the country works through its current crisis, a successful launch of the cryptocurrency "will allow us to overcome any financial blockade."

Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.