Venezuela Launches Oil-Backed Cryptocurrency (bbc.co.uk)

Venezuela has launched a cryptocurrency backed by oil in an attempt to bypass tough economic sanctions imposed by the U.S. government. "The 'Petro' is intended to bolster the country's crumbling economy, which has been suffering from hyperinflation and devaluation for years," reports the BBC. "Venezuela claims it is the world's first sovereign cryptocurrency." From the report: Critics say the move is a desperate attempt by Caracas to raise cash at a time when Venezuela lacks the ability to repay its $150 billion of foreign debt. Opposition leaders said the sale constitutes an illegal issuing of debt, while the US Treasury Department warned it may violate sanctions imposed last year. The government says the currency aims to circumvent US sanctions on the economy. President Nicolas Maduro has said each tokens will be backed by a barrel of Venezuelan crude. The Latin American country has the world's largest proven oil reserves. A total of 100 million Petros will be sold, with an initial value set at $60, based on the price of a barrel of Venezuelan crude in mid-January. The official website published a guide to setting up a virtual wallet in which to hold the cryptocurrency, but did not provide a link for actually doing so on Tuesday.

Comments

I predict a lot of folks piling in

[rsilvergun]

and piling on Venezuela. Venezuela is in a uniquely strange position. They were a third world hell hole that suddenly had a ton of oil money and for some bizarre reason instead of hoarding for the ruling class they used it to (briefly) become a first world nation. When the oil money bubble burst they went right back to being a poor country because, well, besides oil they're a poor country. Saudi Arabia gets away with this crap because their oil's easier to get to than the big V.

Anyway, I find it funny that what we have here is a country that is quite possibly going to use Cryptocurrencies for what the libertarian types have always dreamed of: to whit, getting off the Petro-Dollar; and those same libertarians seem to be ready to slag them non-stop because (as near as I can tell) the Socialisms. It is funny watching the cognitive dissonance at work though.

Re:The best of all three worlds!

[Uberbah]

Basing all their decisions on one commodity is a sure fire way to collapse an economy when alternative sources for said commodity exist. The problem isn't the people (rarely is), it is the government that knows better than everyone else what's good for everyone else. I'm sure the leaders in that country aren't suffering.

Venezuela has an ideal climate for agriculture. But they import food because NAFTA has dumped subsidized crops into the market below the cost of production. As with most American complaints on Venezuela, this one needs to be aimed at the nearest mirror.