President Nicolas Maduro announced on Sunday that Venezuela would create a digital currency to combat a financial blockade by the United States (US).
It will be called “Petro” and be backed up by Venezuela’s reserves of oil and gas as well as its gold and diamond holdings, Maduro said in his weekly television program.
“This is going to allow us to move toward new forms of international financing for the country’s economic and social development,” he noted.
The news comes as Venezuela faces acute financing problems after creditors and ratings agencies declared the government and the state run oil firm PDVSA to be in partial default for missing interest and principle payments on bonds.
Maduro has blamed those problems on sanctions imposed by the US in August, barring American citizens and companies from buying any new Venezuelan government or PDVSA bonds.
Venezuela is mired in a deep economic crisis triggered mainly by a fall in crude oil prices and a drop in oil production. Petroleum is its main source of hard currency.
Over the past year, the Venezuelan bolivar has plummeted 95.5 percent against the dollar on the black market.