Venezuela to launch commodity-backed digital currency

After obliterating the bolivar, the Venezuelan government is now considering adopting a digital currency that it can destroy.

Reuters is reporting that President Nicolas Maduro announced on Sunday that the government will establish the “Petro,” a Venezuelan digital currency that will be backed by oil reserves, gas, gold, and diamond reserves.

Speaking on a five-hour broadcast of Christmas songs and dancing, Maduro stated that “Venezuela will create a cryptocurrency” and the new virtual currency will “overcome the financial blockade.”

Of course, the socialist leader was short on details, and refrained from providing anything specific pertaining to his initiative.

The opposition doesn’t think this will ever come to fruition, especially since the creation of a new currency needs congressional approval. Also, the country is stuck in a humanitarian crisis, where there is very little access to basic essentials, like food, water, and medicine. Even electricity is difficult to have (how can you have a digital currency without power?).

What makes this interesting is that a socialist is calling for some kind of commodity-backed currency. It likely won’t see the light of day, and a central planner could never make something like this succeed. But it is an interesting turn of events for the cryptocurrency market, sound money advocates, and the so-called socialist paradise.

Should Venezuela push ahead with this concept, the Latin American country would become another state that is veering away from the U.S. dollar, joining the likes of Russia, Iran, and perhaps even China. The U.S. dollar hegemony is dissipating.

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