Caracas, Venezuela – with Bitcoin soaring to some new record high daily, Venezuelan President Nicolas Maduro announced that to bypass the U.S. – led financial sanctions Venezuela would launch a digital cryptocurrency backed by oil.
As cited by El Periodico, in a statement on state broadcaster VTV Maduro said:
“Venezuela is proclaiming the creation of its cryptocurrency, which is called The Petro. It will permit us to innovate towards new forms of international finance for the economic and social development of the country.”
According to Reuters, even though just a few details were released about the planned cryptocurrency, Maduro, noted that the Petro would be backed by oil, gas, gold and diamond reserves.
Venezuela also boasts the largest proven reserves of crude oil in the world but has struggled against the plunge in oil prices that start in 2014.
According to Reuters, amid ongoing venezuela us sanctions, spearheaded by the United States, the national currency of Venezuela, the Bolivar, has lost approximately 57% of its value, in the last four weeks alone.
“The 21st century is here,” said Maduro, nothing that the move would allow Venezuela to “advance in issues of monetary sovereignty, to make financial transactions, as well as overcome the financial blockade.”
This is just the latest move that Venezuela made to undermine the hegemonic control of the global financial system, maintained by the United States which is underpinned by using the petrodollar as the world reserve currency.
The report of Wall Street Journal explains that the Venezuelan President also followed through on the threat to stop accepting US Dollars which are used as payment for crude oil exports, in the wake of sanctions by the Trump administration.
The president Nicolas Maduro said that if the Trump administration, went forward with the sanctions, Venezuela would “free” itself from the US Dollar.
According to one report by Reuters:
“Venezuela will implement a new system of international payments, as well as create a basket of currencies to free people from the dollar,” said Maduro in a multi-hour address to a new legislative “super body.”
Maduro also noted that his country would look to the BRICS countries, as well as start using the Chinese yuan and Russian ruble instead, together with some other currencies, to bypass the US Dollar stranglehold.
“If they pursue us with the dollar, we are going to use the Russian ruble, the yuan, yen, the Indian rupee, the euro.”
The Wall Street Journal also reports that as a means of circumventing U.S sanctions – the preferred weapon of choice of Washington to make compliance – Venezuela has told the oil traders that it will no longer send, as well as receive payments in dollars, according to some people that are familiar with the new policy.
Rather than working diplomatically with other nations, the United States usually uses financial sanctions to force compliance with preferred policy, which is a phenomenon known as dollar hegemony.
As the dollar has been accepted as the reserve currency of the world, almost all financial transactions are denominated in dollars.
The phenomenon also gives the US a powerful weapon to wield against states which refuse to follow US directives, and which also underpins the unipolar model of global domination exercised by the US.
As cited by Panorama, Maduro also added:
“Every one of us is facing a financial war against the country which we have denounced, and the opposition has denied. There are also business people that are unaffected by the blockade of Donald Trump. With this, we are going to join the 21st century.”
La Patilla reports that Maduro also approved the creation of a BlockchainBase observatory to oversee the development and implementation of the new cryptocurrency.
The movement of Maduro away from the U.S. dollar and towards cryptocurrency the spectacular rise of bitcoin also comes amid, which is now valued over USD 11,000 per BTC, which also has been fueled by signs which show that the digital currency is slowly gaining mainstream acceptance in the investment world.