During his speech at the meeting of the Bolivarian Alliance for the Peoples of Our America-Peoples Trade Treaty (ALBA-TCP) on Friday, Maduro said that each petro’s value would be pegged to the country’s immense oil and gas reserves, as well as its mineral wealth, including gold and diamonds.
The Venezuelan president said that the reason behind such an endeavor was “to advance the country’s monetary sovereignty, to carry out financial transactions and to defeat the financial blockade against the country.”
“I have a proposal for the economic teams of the ALBA: to assume jointly the creation of an oil-backed petro cryptocurrency, which will be supported with Venezuelan oil and that very soon we will sustain with the wealth of Venezuela’s gold and diamonds,” Maduro told the delegates.
Earlier, Maduro said that his government will put together a team of specialists who will set up cryptocurrency mining sites in “all states and municipalities of our country.”
He also said that the country is facing a “financial war” with Washington after the Bolivar was hit by a near 100 percent devaluation against the dollar in 2016. Since then, inflation has risen exponentially, reaching 2, 616 percent last year.
In August of last year, Washington introduced sweeping sanctions against Caracas; barring American businesses from lending to the Venezuelan government or the state-run oil and gas company PDVSA.
Venezuela has the largest oil reserves in the world, but its crude output has been dropping throughout the year, as its national oil company struggled.
The World Bank has estimated that the gross domestic product growth in Venezuela stood at —11.9 percent in 2017. It has also predicted that Venezuela’s economy will contract by 4.2 percent this year, amid extremely high inflation and political uncertainty.
Recently, international ratings agency Standard & Poor’s downgraded the credit rating for one of Venezuela’s state bonds from 'CC' to 'D', which is equivalent to default.