Earlier this month, Venezuelan President Nicolas Maduro announced the launch of an oil-backed cryptocurrency called Petro to rejuvenate the collapsed economy. Maduro claimed the new digital currency would be used to “advance in issues of monetary sovereignty, to make financial transactions and overcome the financial blockade [of the United States].”
5.3 billion barrels of oil worth $267 billion will back the currency, but diamonds and gold are also to be used according Venezuela’s president. Miners are already lining up to take advantage of the launch claims Venezuelan Communication Minister Jorge Rodriguez, but this would be surprising considering that Venezuelan government authorities raided a warehouse to seize mining rigs and announced that Bitcoin mines would need to be registered with the government.
Many Venezuelans had turned to mining Bitcoin due to the nation’s hyperinflation and with electricity being practically free, citizens could make up to $500 a month mining cryptocurrency. “That’s a small fortune in Venezuela today, enough to feed a family of four and purchase vital goods—baby diapers, say, or insulin—online,” states the Atlantic.
One Venezuelan Bitcoin miner makes $1200 daily and is able to ship food via Amazon’s Prime Pantry in an effort to fight the country’s food shortage.
Whether or not Petro will save Venezuela’s economy is uncertain, especially because of its being backed by oil while other cryptocurrencies depend on social value, but it will be interesting to see if this prompts other countries to move towards digital money.