Venezuela sets sights on new cryptocurrency

caracas — Venezuela is preparing a new cryptocurrency called “petro gold” that will be backed by precious metals, President Nicolas Maduro said, a day after launching an oil-backed token that has been panned as a pipe dream by blockchain experts.

Maduro is hoping cryptocurrencies will help Venezuela skirt US financial sanctions as it struggles under hyperinflation and a collapsing socialist economy.

On Tuesday, he said the newly-launched petro cryptocurrency raised $735 million in the first day of a pre-sale.

Opposition leaders call the state-backed cryptocurrency an illegal debt issue, and investors have questioned its value given concerns about Venezuela’s solvency and transparency.

“Next week I’m going to launch the petro gold, backed by gold, which is even more powerful, that will strengthen the petro,” Maduro said in a televised speech.

It was not immediately evident if he was referring to gold reserves in the central bank or to undeveloped mineral deposits.

Maduro did not offer further details on it.

The Information Ministry did not immediately respond to a request for comment.

Gold-backed cryptocurrencies already exist, including one called RMG created by The Royal Mint in Britain. But blockchain experts have broadly panned Venezuela’s cryptocurrency efforts, noting that digital tokens are only as valuable as the faith inspired by their issuer. —