that the country will launch
its own cryptocurrency,
called the "Petro,"
which will be backed by
the country's vast natural
With Bitcoin soaring to new record high daily, Venezuelan President Nicolas Maduro announced Sunday that in an effort to bypass U.S.-led financial sanctions Venezuela would launch a digital cryptocurrency backed by oil.
Although few details were released about the planned cryptocurrency, Maduro noted that the Petro will be backed by oil, gas, gold and diamond reserves, according to Reuters.
Venezuela boasts the largest proven reserves of crude oil in the world but has struggled against the plunge in oil prices which began in 2014.
Amid ongoing economic sanctions, spearheaded by the United States, Venezuela's national currency, the Bolivar, has lost approximately 57 percent of its value in the last four weeks alone, according to Reuters.
This is simply the latest move by Venezuela to undermine the hegemonic control of the global financial system maintained by the United States, which is underpinned by use of the petrodollar as the world reserve currency.
In September, the Wall Street Journal reported that Venezuelan President Maduro followed through on his threat to stop accepting US Dollars as payment for crude oil exports in the wake of sanctions by the Trump administration.
President Nicolas Maduro said that if the Trump administration went forward with the sanctions, Venezuela would "free" itself from the US Dollar.
According to a report by Reuters:
Maduro noted that his country would look to the BRICS countries, and begin using the Chinese yuan and Russian ruble instead - along with other currencies - to bypass the US Dollar stranglehold.
The Wall Street Journal reports that as a means of circumventing U.S. sanctions - Washington's preferred weapon of choice to force compliance - Venezuela has told oil traders that it will no longer send or receive payments in dollars, according to people familiar with the new policy.
Rather than work diplomatically with other nations, the United States often uses financial sanctions to force compliance with preferred policy - a phenomenon known as dollar hegemony.
Due to the dollar being accepted as the world's reserve currency, almost all financial transactions are denominated in dollars.
This phenomenon gives the US a powerful weapon to wield against states that refuse to follow US directives, and which underpins the unipolar model of global domination exercised by the US.
Maduro approved the creation of a Blockchain Base observatory to oversee the development and implementation of the new cryptocurrency, reports La Patilla.
Maduro's movement away from the U.S. dollar, and towards cryptocurrency, comes amid the spectacular rise of bitcoin, now valued at over $11,000 USD per BTC, which has been fueled by signs that the digital currency is slowly gaining mainstream acceptance in the investment world.