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Venezuelan President Announces Oil-Backed Cryptocurrency "Petro" to Combat 'US Blockade'

Venezuela's President Nicolas Maduro speaks during his weekly radio and TV broadcast

The announcement shows how sanctions enacted by U.S. President Donald Trump's administration this year hurt the country's ability to move money through the global banking system.

Venezuela is to launch its own cryptocurrency to counter what it describes as Washington's "economic sabotage" in the shape of financial sanctions, the country's President Nicolas Maduro confirmed via a national broadcast.

The President has announced the launch of the country's new digital currency called "Petro" which will be backed by oil reserves and other commodity reserves like gas, gold, and diamond.

In a televised announcement yesterday, Maduro said the new crypto-currency would allow Venezuela to advance in issues of monetary sovereignty, to make financial transactions and overcome the financial blockade.

Opposition leaders in Venezuela said that the new cryptocurrency needed congressional approval, and some cast doubt on whether the it would ever see the light of day in the country. Bitcoin, the world's largest digital currency, hit new highs last week, and Maduro declared that his plan will counteract the economic disaster that is befalling the Venezuelan bolivar, which has experienced hyperinflation as the country's economy has collapsed. Compliance departments in the USA have been scrutinizing transactions related to Venezuela.

Maduro blames his country's economic woes on a conspiracy to overthrow him combined with USA economic sanctions, but he intends for a new petrocurrency to overcome those sanctions.

Certain cryptocurrency followers were confused and surprised by the announcement of the Venezuelan leader. Ironically, Venezuela's currency controls in recent years have spurred a bitcoin fad among tech-savvy Venezuelans looking to bypass controls to obtain dollars or make internet purchases.

"It's Maduro being a clown".

Maduro's government has a poor track record in monetary policy. As a result, the minimum wage per month has dropped to a meager $4.30.

"The Maduro dictatorship continues to deprive the Venezuelan people of food and medicine, imprison the democratically-elected opposition, and violently suppress freedom of speech", Trump said in a statement.

Some of the opposition leaders ridiculed the announcement.

"I see no future in this", added fellow opposition legislator Jose Guerra.