http://www.bbc.com/news/world-latin-america-42217798
Nicholas Maduro, the Venezuelan President, announced that Petro, the new cryptocurrency, will be created.
Venezuela has been pressurized economically by the US and the EU. Their economy is also staggering severely, due to reducing oil prices. They owe a debt of around $140 billion to foreign creditors as well. The Bolivar (Venezuelan currency) value is dropping on top of the two bad news. President Maduro's attempt is to ease the economic crisis his country is facing at the moment.
However, if Petro is relying on its country's remaining resources, which, in my opinion, is not that abundant, will not influence the Venezuelan economy greatly. It just seems to be a blunt statement made out of desperation. Simultaneously, bitcoin value has gone up. Perhaps the Venezuelan President got a great idea by finding out that bitcoin is the new real deal. Its greatest advantage is that it does not follow the rules of the standard currencies, which always change in value due to economic situations and relations between countries. Petro value, according to President Maduro, will be based on oil, diamond, and gold reserves that Venezuela owns. How will he be able to create a mechanism to make Petro valuable, when Venezuela cannot get a hold of that much on its own? If he is serious about the plan, there has to be a very well-thought method to make Petro a precious currency.
I am curious of how President Maduro is going to pull out the creation of a new cryptocurrency. As much as it sounds preposterous when Venezuela is in a pickle, I am interested to see if the new virtual money will save the country.
Venezuela is very unlikely to attain this form of currency. Cryptocurrencies, supposedly, function independently of a central institution. The reason why cryptocurrencies are gaining popularity is because they do not work through the system.
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