Following last week’s coup to oust Zimbabwe’s Mugabi, Venezuelan President Maduro tries desperate move with new sovereign cryptocurrency
As Zimbabwe began moving into its newest round of monetary hyperinflation, the government finally decided to step in last week and force out the long reigning dictator Robert Mugabi.¬† And with Venezuela also residing in a state of hyperinflation and imminent insolvency, President Maduro appears to be trying one last desperate act to stay in power by announcing on Dec. 3 plans to create a sovereign cryptocurrency.
Fast forward to today when seemingly impressed by the global crypto craze, Maduro on¬†Sunday announced the creation of¬†the “Petro“,¬†Venezuela’s official cryptocurrency “to advance in the matter of monetary sovereignty, to make financial transactions and to overcome the financial blockade”.
“Venezuela announces the creation of its cryptocurrency,¬†the Petro; this will allow us to move towards new forms of international financing for the economic and social development of the country,” Maduro said during his weekly television program, broadcast on the state channel VTV.
“The objective is to advance in the Venezuelan economy and overcome the financial blockade, this allows us to continue in the economic and social development supported by Venezuelan riches,” said the president, explaining that his government will make a cryptocurrency issue “backed by reserves of Venezuelan gold, oil, gas and diamond wealth.” –¬†Zerohedge
Ironically, Zimbabwe was also in the process of creating ‘resource backed’ currency by allegedly saving up gold, silver, and diamond output as a means to end their currency’s hyperinflation, and try to bring back confidence through a form of sound money.¬† And as noted above from President Maduro’s speech today, he is attempting to co-opt that same model, but under the guise of a completely different currency… a crypto one.
With rampant starvation, civil unrest, and a complete takeover of the government by Maduro being Venezuela’s legacy over the past year, it will take much more than the creation of a cryptocurrency scheme to save the insolvent oil nation.¬† And like all government schemes in the face of a crisis, it may save the President’s power structure in Caracus in the short-term, but not as a real and long-term solution to his country’s problems.
Kenneth Schortgen Jr¬†is¬†a writer for¬†The Daily Economist,¬†Secretsofthefed.com,¬†Roguemoney.net, and¬†Viral Liberty, and hosts¬†the popular¬†youtube podcast¬†on Mondays, Wednesdays and Fridays.¬†Ken can also¬†be heard Wednesday afternoons giving an weekly economic report on the¬†Angel Clark radio show.