Venezuelan President Nicolas Maduro announced the creation of the “ El Petro”, a cryptocurrency backed by oil reserves yesterday. To support the present economy of the nation, and as a part of accepting the world of digital currency, the announcement was made.

“Venezuela will create a cryptocurrency,” backed by oil, gas, gold and diamond reserves.

In a five-hour showcase of Christmas songs and dancing televised broadcast, Maduro said 'El Petro' would be supported by country's rich reserves of oil and minerals. Currently, Venezuela's economy is collapsing under huge debt. To advance in issues of monetary sovereignty, to make financial transactions and overcome the financial blockade, Venezuela will create a new cryptocurrency, he said.

Opposition derided the announcement, audiences were skeptical too. Many believe that cryptocurrency may have a future and if backed by central government or a commodity may succeed but Venezuela may not be a very good example for other countries to follow cryptocurrency.

According to a report, currency controls and excessive money printing have led to a 57 percent depreciation of the bolivar against the dollar in the last month alone on the widely used black market. That has dragged down the monthly minimum wage to a mere $4.30 (3.2 pounds).

U.S. President Donald Trump’s administration has levied sanctions of relief fund for food and drugs for Venezuelan against Venezuelan officials, PDVSA executives and the country’s debt issuance. Announcement of 'El Petro' could be Maduro's pivot away from the U.S. dollars.

The recent rise of Bitcoin, supports the belief of cryptocurrency getting mainstream attention.

This announcement is unlikely to bring any immediate relief, but if it is helpful to fight a financial war in Venezuela is something world would be interested to know.

Voice your opinion - Is it a good move for people of Venezuela? Please leave you comments below.

Also Read: Cryptocurrency is welcome in Iran

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