Nicolás Maduro, Venezuela's infamous president, has allocated 5.3 billion barrels of crude oil worth roughly $267 Billion to back their planned national cryptocurrency called Petro. It will essentially be an oil-backed cryptocurrency.
They will release further details on necessary conditions for Petro to fully launch.
Remember that Venezuela is currently in a state of hyperinflation and is facing several sanctions from the United States.
Venezuela's President Maduro thinking of an escape plan
Here is an excerpt from my earlier blog post about how Venezuela got into this mess:
"This is somewhat similar to the first consequence. The difference is that it refers to the increase in prices of commodities. Venezuela is one of the best examples of this effect. In 2016, the government raised their country's minimum wage by 40%. Financial analyst Ruben Liscano has continuous warned the Venezuelan government of the ill effects of this band-aid solution to their economic crisis. According to Liscano, inflation increased by as much as 70% compared to 2015.
The government has been trying to combat their country's problematic inflation for years. They tried to mandate floor and ceiling prices for goods as to stop the skyrocketing cost of living. But they fail to realize that limiting prices while requiring businesses to increase wages is crippling their economy.
The current minimum wage is certainly not enough. At some point in the future, it has to be increased for families to be able to live a comfortable life. But before that could happen, our economy has to improve and the Philippine currency must be strong enough to counter its ill effects."
I personally don't think the Petro is what their country needs right now. Introducing a new type of currency that will only be accessible to a few while the majority of your country continues to starve because of your own mismanaged financial policies is just wrong.
