Venezuela wants to introduce its own cryptocurrency

Venezuelan President Nicolás Maduro has announced the creation of a cryptocurrency called Petro. It must represent value by linking to the country’s stock of oil, gas, gold and diamonds.

The currency should help Venezuela transact, solve problems with financial sovereignty and provide a way to evade financial sanctions, Reuters writes in response to Maduro’s announcement. The president gave little further details about the Petro. According to the news agency, the announcement caused confusion in the cryptocurrency community, as such currencies are typically unrelated to any government or central bank.

Opposition members are critical of the plans, saying the currency is unlikely to take off amid the country’s economic crisis. In addition, the measure would require congressional approval. Opposition leaders believe Maduro may want to repay the country’s debt in the new currency. The Venezuelan currency, the Bolivar, has lost much of its value. Excessive money production and other measures led to a 57 percent loss in value against the dollar last month, the news agency said.

Sanctions imposed by the US government would also make it difficult to send money through international banks. Maduro’s announcement follows widespread attention to bitcoin’s appreciation. The coin reached a price level of $10,000 for the first time last week and then quickly rose to $11,000.