President claims digital currency called the ‘petro’ will be backed by Venezuelan reserves of gold, oil, gas, and diamonds

This article is more than 2 years old

This article is more than 2 years old

President Nicolas Maduro has said Venezuela would launch a cryptocurrency to combat a US-led financial “blockade,” although he provided few clues about how the economically crippled Opec member would pull off the feat.



“Venezuela will create a cryptocurrency ... the ‘petro,’ to advance in issues of monetary sovereignty, to make financial transactions and overcome the financial blockade,” leftist Maduro said during his weekly Sunday televised broadcast.

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The digital currency will be backed by Venezuelan reserves of gold, oil, gas, and diamonds, he said during the near five-hour show, which included traditional Christmas songs and dancing.

“The 21st century has arrived!” Maduro added to cheers, without providing specifics about the currency launch.

Opposition leaders scorned the announcement, which they said needed congressional approval, and some cast doubt on whether the digital currency would ever see the light of day in tumultuous Venezuela.

Still, the announcement highlights how US sanctions this year are hurting Venezuela’s ability to move money through international banks. Sources say compliance departments are scrutinising transactions linked to Venezuela, which has slowed some bond payments and complicated certain oil exports.

Maduro’s move away from the US dollar comes after the recent spectacular rise of bitcoin, which has been fuelled by signs that the digital currency is slowly gaining traction in the mainstream investment world.

Profile Who is Nicolás Maduro? Show Hide Political career Nicolás Maduro has ruled Venezuela without two of the greatest assets possessed by his mentor and predecessor, Hugo Chávez. He has not been lucky. And he has no charisma. Chávez enjoyed an oil bounty and sublime political talents that secured his power at home and reputation abroad. Maduro, in contrast, inherited a wobbling economy addicted to high oil prices and a system of authoritarian populism dependent on showmanship and patronage. Oil prices tumbled and Maduro proved to be a fumbling showman, exposing the financial ineptitude and ideological hollowness of the “Bolivarian revolution”. This could have doomed his presidency, which began in 2013 after Chávez died, but the former bus driver, a hulking bear of a man who rose up trade union ranks, turned out to be tenacious and ruthless. Born into a working class family in Caracas in 1962, he left school without graduating and drove buses for the Caracas metro. He became a union organiser and early supporter of Chávez, who, after leading a failed coup, led a leftwing coalition to an electoral landslide in 1998. Maduro was the speaker of the assembly before serving as Chávez’s foreign minister from 2006 to 2013, a visible if largely silent presence as the comandante held court on the world stage. Chávez anointed Maduro as his heir before succumbing to cancer. The story of his rule – and Venezuela’s agony – is a determination to keep power amid economic collapse, humanitarian disaster and international condemnation. Since January 2019 his presidency has been disputed, with Juan Guaidó being sworn in as interim president, and recognised as Venezuela’s ruler by some international powers. Crisis after crisis has buffeted his government – hyperinflation, food and medicine shortages, power blackouts, mass protests, drone attacks, defections, US-led sanctions – and Maduro has remained standing, resolute, implacable. It is a remarkable position for a man who, in a 2014 Guardian interview, described himself as a bit of a hippy and a fan of Led Zeppelin and John Lennon. “I never aspired to be president,” he said. “I always honour something that commander Chávez told us: that while we were in these posts we must be clothed in humility and understand that we are here to protect the man and woman of the streets.” Rory Carroll

Cryptocurrencies typically are not backed by any government or central banks. Bitcoin already has a strong following among tech-savvy Venezuelans looking to bypass dysfunctional economic controls to obtain dollars or make internet purchases.

Venezuela’s traditional currency, meanwhile, is in free fall.

Currency controls and excessive money printing have led to a 57% depreciation of the bolivar against the dollar in the last month alone on the widely used black market. That has dragged down the monthly minimum wage to a mere $4.30.

For the millions of Venezuelans plunged into poverty and struggling to eat three meals a day, Maduro’s announcement is unlikely to bring any immediate relief.

“It’s Maduro being a clown. This has no credibility,” opposition lawmaker and economist Angel Alvarado told Reuters.

“I see no future in this,” added fellow opposition legislator Jose Guerra.

Maduro says he is trying to combat a Washington-backed conspiracy to sabotage his government and end socialism in Latin America. On Sunday he said Venezuela was facing a financial “world war.”