Economy-plagued Venezuela unveils a new cryptocurrency in a bid to alleviate economic crisis.
Venezuelan President Nicolas Maduro announced the news on Sunday, saying the new digital currency, Petro, will be backed by Venezuela's oil, gas, gold, and diamond wealth.
In the televised announcement, he said the cryptocurrency will be used "to advance in issues of monetary sovereignty, to make financial transactions and overcome the financial blockade."
Recent years showed a plummeting value for Venezuelan money bolivar as the South American country is hit by a falling revenue on oil.
Venezuela has been heavily reliant on its oil wealth for economic support. When the oil prices suddenly declined, it had nothing to hold on to for support.
Now the country is nearly drowning in debt, with a current estimate of $140 billion, to foreign creditors. Economists believe that the president hopes to pay them back with Petros.
Mr. Maduro's move comes in light of the global interest in cryptocurrency, after bitcoin nearly surpassed the $10,000 mark last week.
The president, however, failed to get the support of opposition lawmakers. They insist that the proposed currency would need the backing of the National Assembly, a confirmation that they doubt the Petro will receive.
"It's Maduro being a clown. This has no credibility," opposition lawmaker and economist Angel Alvarado told Reuters.
Apart from the new currency, the Venezuelan president also announced the creation of a "blockchain observatory," which would be a software platform for buying and selling virtual currency.
Not much details about the currency and its trading software have been revealed, and some believe the possibility of a success is limited. Analyst Henkel Garcia, director of consultancy Econometrica, is one of them.
"You can build it, but trust, acceptance and use is what will determine the cryptocurrency's success. For me, it will be quite limited. The bolivar is also backed by reserves and has no strength," said Garcia.
