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Venezuela Plans to Create Cryptocurrency System to Overcome Financial Blockade

© REUTERS / Miraflores PalaceVenezuela's President Nicolas Maduro speaks during a meeting with businessmen in Caracas, Venezuela January 9, 2017
Venezuela's President Nicolas Maduro speaks during a meeting with businessmen in Caracas, Venezuela January 9, 2017 - Sputnik International
The Venezuelan Finance Ministry has announced its plans to establish its own cryptocurrency system to carry out financial transactions and search for new financing options.

MOSCOW (Sputnik) — Venezuelan President Nicolas Maduro has said that the country will set up a cryptocurrency system called El Petro in order to overcome the financial blockade, according to the Venezuelan Finance Ministry.

"President Nicolas Maduro announced that Venezuela would create a cryptocurrency system, which will be called El Petro, in order to make progress on currency system and overcome financial blockade," the Finance Ministry said Sunday.

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The ministry noted that cryptocurrency is necessary for carrying out financial transactions and searching for new financing options.

In August, the United States imposed sweeping financial sanctions on Venezuela, forbidding US businesses from lending to the Venezuelan government or the state-run oil and gas company PDVSA. The sanctions also cut into the dividends that PDVSA's US subsidiary Citgo may send back to Venezuela.

The announcement comes the same week as the world's most popular cryptocurrency Bitcoin has broke past its $10,000 value mark, growing more than 11-fold since the beginning of the year. However, some experts claim that such a quick rate of the currency's value growth may keep it from long-term sustainability.

Cryptocurrencies have been getting mixed reception from governments around the globe. While in some countries they are legal as a means of payment, in others they have no legal status yet or even got banned. Many experts claim that such currencies as Bitcoin pose threat to the global economy, as they simply cannot be controlled by the government.

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