The “Bolivar Bitcoin” is Coming, Steer Clear
Venezuela is creating a digital currency to combat a financial blockade by the United States, President Nicolas Maduro announced Sunday.
It’s version of Bitcoin will be called the “Petro” and be backed up by Venezuela’s reserves of Crude Oil and Nat Gas and its Gold and Diamond holdings, the President said in his weekly TV program.
“This is going to allow us to move toward new forms of international financing for the country’s economic and social development,” the President said.
The news comes as Venezuela faces acute financing problems after creditors and ratings agencies declared the government and the state run Crude Oil firm PDVSA to be in partial default for missing interest and principle payments on bonds.
A desperate and embattled President Maduro blames those problems on sanctions imposed by the United States in August, barring American citizens and companies from buying any new Venezuelan government or PDVSA bonds.
The Big Q: Who will buy the Bolivar Bitcoin?
Venezuela is mired in a deep economic crisis triggered mainly by a fall in Crude Oil prices and a drop in Crude Oil production. Petroleum is its main source of hard currency.
Over the past year, the Venezuelan Bolivar has fallen 95.5 Vs USD on the “black market”.
Have a terrific week.