In the first week of December, Venezuela’s President Nicolas Maduro had announced the creation of Petro – the digital currency of Venezuela – to fight the US sanctions and lead the country in the path of economic and social development. In the past year alone, Bolivar, the currency of Venezuela has declined by 95% ($1 = 84,000 Bolivars).
Thus, crypto currency such as the Bitcoin has already gained tremendous popularity among the people. By introducing a digital currency, the government aims to bring down high inflation, which has soared to 4,000%. To gain the confidence of investors and businessmen, the government has decided to back the digital currency with five billion barrels of crude oil.
The decision was announced by Maduro, while giving a speech on the country’s national television network. The Petro will be backed by the certified Ayacucho oil field No.1 in the Orinoco Petroleum Belt.
“Every single Petro will be backed by a barrel of oil. We will set up a special team of crypto currency specialists, so they will be engaged in mining in all states and municipalities of our country.”
Further, Maduro also announced that the crypto currency will also be supported by the gold deposits of the Arco Minero del Orinoco belt and diamonds from the country’s natural reserve.
Venezuela may be followed by a host of other countries such as Russia (CryptoRuble) and Israel (Digital Shekel) in creating a digital currency. Dubai’s Economy Department has already partnered with one of its subsidiaries called Emcredit Limited and U.K.-based Object Tech Group, Ltd. to create the digital currency named “emCash”.
It is becoming clear that more governments will join the crypto bandwagon soon.