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Published On: Tue, Dec 5th, 2017

Venezuela to lauch crypto currency to bypass U.S. sanctions

nsnbc : Venezuelan President Nicolas Maduro said his country will launch a crypto currency to bypass what he described as the United States’ financial blockade imposed on Venezuela.

Nicolas Maduro_Dec 2017_Presidential Press_VenezuelaThe new currency will be called “petro” said Maduro in a TV address on Sunday. He added that Venezuela’s oil, gold, and mineral reserves should back the currency. So far, it remains to be seen how the OPEC – of which Venezuela is a member, and strategic partners like China and Russia will respond to the socialist (PSUV) administration’s initiative. Maduro said the introduction of the digital currency will allow Venezuela to advance toward new norms of international financing for its economic and social development.

‘That Venezuela is going to implement a new cryptocurrency system from the oil reserves, Venezuela will create a cryptocurrency, the petro-currency, the petro, to advance in monetary sovereignty, to make their financial transactions, to overcome the financial blockade. This will allow us to move towards new forms of international financing for the economic and social development of the country. And it will be done with a cryptocurrency issue backed by reserves of Venezuelan riches of gold, oil, gas and diamond.’

Maduro did not mention any details such as the value of the new currency, how it will be regulated and work, or when it will be launched. Maduro also didn’t go into details concerning the possible responses of OPEC members and of Venezuela’s strategic trading partners.

However, the PSUV government has already announced the creation of a ‘blockchain observatory’ software platform for buying and selling virtual currency. Opposition leaders objected to Maduro’s announcement, which they said needed congressional approval – a small hurdle to overcome after the so-called “constitutional coup” earlier this year. Some also questioned whether the digital currency would even be introduced in the midst of turmoil. Venezuela’s traditional currency, the bolivar, has significantly declined in recent weeks as U.S. sanctions make it harder for the country to stay current on its foreign debt.

Yet another aspect is that critics fear that the PSUV government’s introduction of an “official” crypto currency will set a dangerous precedent that, if introduced more globally, and for private use, could lead to even more State control over where and how citizens spend their money.

A/N & CH/L – nsnbc 05.12.2017

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