All about Petra, Venezuela's new cryptocurrency

World

04 Dec 2017

Venezuela to launch new cryptocurrency 'Petra' amid economic crisis

In a bid to revive Venezuela's economy, President Nicolas Maduro has announced the creation of a new virtual currency.

Maduro said the new currency "Petra" would be backed by the country's oil, gas, gold and diamond wealth.

Opposition leaders have slammed Maduro's decision.

The move comes amid increasing global interest in Bitcoin, a leading cryptocurrency.

Here's more about it.

Details

What are cryptocurrencies?

What are cryptocurrencies?

Cryptocurrencies use cryptography for security, regulation, and generation of currency units.

They are created and transacted electronically and are difficult to counterfeit.

As central authorities don't issue them, all cryptocurrencies are "immune" to government interference. There are no middlemen, not even banks!

Bitcoin, invented by an unknown person under the pseudonym Satoshi Nakamoto in 2009, is the most popular cryptocurrency currently in circulation.

Background

Economic crisis in Venezuela

Venezuela has an oil-based economy based on abundant energy reserves.

The slump in oil prices along with the plummeting value of its currency, Bolivar has compounded a pre-existent economic crisis, leading to severe shortages of food, medicine, and other essential items.

Inflation in the country stands at 700%.

The country owes at least $140bn to foreign creditors and is tied down by US sanctions.

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Speech

Maduro: 'The 21st Century has arrived!'

In a televised announcement, Maduro stated that the new virtual currency would help Venezuela "advance in issues of monetary sovereignty, to make financial transactions and overcome the financial blockade".

"The 21st Century has arrived," he stated to loud cheers from supporters.

Maduro didn't reveal details on when or how Petra would be launched.

Criticism

Critics slam Maduro

Maduro is perceived as a dictator by large sections of Venezuela. His policies are highly unpopular.

Responding to Maduro's announcement, opposition MPs insisted that the introduction of Petra would require Congressional backing.

Speaking to Reuters, Opposition MP and economist Angel Alvarado stated: "It's Maduro being a clown. This has no credibility."

"I see no future in this," said fellow opposition MP Jose Guerra.

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Venezuela

Venezuela Crisis

Cryptocurrency

Nicolas Maduro

Bitcoins

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Digital Payment

21st Century

Angel Alvarado

Bolivar

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