Venezuela’s is never entirely out of the cryptocurrency news scenario. Just when one headline starts to fade away, another comes up. All thanks to President Maduro and his controversial oil backed cryptocurrency Petro.
Maduro is making the headlines today as the Venezuelan economy is plunging. Venezuela, which is facing a worsening liquidity crisis, is to release US$1 billion into the economy obtained through the sale of the Petro, said President Nicolas Maduro.
Maduro says that the aim was to boost the country’s international reserves and its foreign currency reserves and to halt the rise of the black market dollar.
Venezuela is suffering crisis despite having world’s largest proven crude oil deposits, Venezuela’s foreign reserves have dwindled to $9.7 billion while it must pay off some $8 billion this year.
Maduro said that sales of the petro, had brought $3.3 billion into the state coffers, of which $1.7 billion would be set aside for importing “food, medicine and industrial goods.”
The remaining lot of $1.6 billion, $1 billion would be transferred to Venezuela’s Central Bank on Friday “for currency auctions and to continue fighting the devil,” he said referring to the so-called “black dollar.”
Venezuela’s economic woes have much to do with the slump in recent years in the price of oil, which accounts for some 96 percent of the country’s revenue.
The US order from Donald Trump had also threatened Petro when Trump took out a circular banning the sale of Petro within the US. While all this, Venezuela’s opposition party also strongly condemned Petro cryptocurrency as a scam and reported it as a very disorganized ICO.
It has also blamed the country’s cash crisis on mafias accumulating cash in order to speculate.
Last week, the IMF said Venezuela’s economic collapse ranked as one of the worst in modern history, with massive hyperinflation likely to see prices soaring 13,000 percent this year.
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