Venezuela to launch cryptocurrency to fight Trump sanctions

Venezuela to launch 'Petro' cryptocurrency to fight Trump's 'financial blockade'

Venezuelan President Nicolas Maduro announced Sunday the country will create a new cryptocurrency system called "petro" backed by its oil reserves and other natural resources.

The leftist leader offered few specifics about the currency launch or how the struggling OPEC member would pull off such a feat, but he declared to cheers that "the 21st century has arrived!"

The currency would help Venezuela "to advance in monetary sovereignty, carry out its financial transactions to overcome the financial blockade", according to Maduro. However, opposition leaders in Venezuela aren't convinced it'll solve the country's problems, as they say the petro needs congressional approval, and some have cast doubt on whether it will ever see the light of day, taking into account the country's situation.

Still, the announcement highlights how sanctions enacted this year by U.S. President Donald Trump's administration are hurting Venezuela's ability to move money through worldwide banks. The real currency, the bolivar, is in freefall, and the country is sorely lacking in basic needs like food and medicine.

Hyperinflation has eroded the Venezuelan bolivia's value by 97% this year, making imports incredibly expensive and causing many to abandon trust in the currency. This led the monthly minimum wage in the country down to a mere $4.3.

Maduro blames his country's economic woes on a conspiracy to overthrow him combined with US economic sanctions, but he intends for a new petrocurrency to overcome those sanctions.

Opposition leaders in Venezuela, reportedly, have rejected his idea.

Maduro's administration does not have a brilliant history in financial policy.

The leader might be looking to make payments to foreign creditors and bondholders in the cryptocurrency in an attempt to streamline the significant debt burden of the country, say opposition leaders. Reuters quoted lawmaker Angel Alvarado, who said that the idea has "no credibility".

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