Venezuelan President Nicolás Maduro announced in a televised December 3 speech that his country will issue a cryptocurrency called “Petro,” the value of which will be backed by “the nation’s natural riches,” including gold, oil, and gas. Shortly thereafter, a press release appeared on the president’s website explaining that the move would aim to bolster the nation’s “sovereignty and independence.”
The document suggests that as a result of crippling sanctions levied by the United States, trade has failed to win Venezuela its economic self-determination. It projects that the proposed currency will “advance monetary sovereignty, as it will help to overcome the financial blockade and thus move towards new forms of international financing for the economic and social development.”
Opposition politicians hit back, claiming that the plan requires congressional approval, which they would be hard-pressed to grant. Some of them have speculated that the decision to create Petro is a ploy to reduce the national debt load by creating a medium through which the government can pay out bondholders and foreign creditors.
In the last year, Venezuelans have taken to the streets to protest a wide range of issues, including food insecurity and out-of-control inflation. Generally speaking, those in power allege that sabotage originating at home and abroad is preventing the country from making an economic recovery, while opposition figures accuse the governing party and its leadership of incompetence.
In addition to announcing Petro, Maduro declared that a government body known as the Blockchain Observatory would be established to provide “an institutional, political and legal basis for the launch of the Venezuelan cryptocurrency,” and that a National Center for Scientific and Technological Production would be inaugurated to “strengthen” the nation’s economic plan.
The possibility of a state-issued cryptocurrency was seemingly discussed in an October 4 meeting between central bankers and private sector cryptocurrency experts.
While the country’s leadership now appears to be embracing virtual currency, at least in some ways, reports of miners being arrested have circulated in months past. In February 2017, the Venezuelan digital asset exchange SurBitcoin announced that its bank account was being closed and urged users to withdraw their holdings from the platform. Today, it is operational again.