Venezuelan president Nicolás Mauro thinks that a new digital currency could revive the country from economic collapse and help it sidestep US sanctions. During the latest episode of his weekly TV show Los Domingos con Maduro, the president announced his plans to launch the ‘petro’ – a digital currency somehow backed up by Venezuela’s oil, gas and diamond reserves.
“Venezuela will create a new cryptocurrency,” Maduro told his live studio audience during the five-hour broadcast, which also included Christmas songs and dancing. The petro would help Venezuela “advance in issues of monetary sovereignty, financial transactions and overcome the financial blockade,” he said. Venezuela’s existing currency, the bolívar, is rapidly dropping in value, reducing the monthly minimum wage to just over $4.30 and plunging millions of Venezuelans into poverty.
It looks like Maduro has had one eye on the rising price of bitcoin, which is already on its way to $12,000 after breaking the $10,000 barrier for the first time late in November. Somewhat ironically, some Venezuelan citizens are already well ahead of Maduro when it comes to the cryptocurrency, and started mining bitcoin as a way of earning enough US dollars to import food and medical supplies.
Venezuelan opposition leaders quickly decried Maduro’s proposal, saying it lacks credibility and has no hope of being passed by congress.
A legislature can pass anything it has the votes for. Making it work is a different matter, and one where socialist governments have a history of total failure.