Categories: CryptoNews

President Maduro Sets Sights on New Cryptocurrency Backed by Venezuelan Gold Reserves

The Venezuelan government is quite keen on creating new cryptocurrencies, by the look of things. Following the success of its initial Petro sale, a plan has been devised to create Petro Gold. This new token will be backed by the country’s precious metal reserves.

The Petro Gold Token may Become a Thing

It is safe to say Venezuela can only be saved by cryptocurrencies at this point. Whether that means existing and established cryptocurrencies such as Bitcoin and Ethereum will play any role of importance has yet to be determined. For now, it seems the government is more focused on creating its own cryptocurrencies. The Petro was introduced to investors earlier this week and has raised a staggering amount of money already.

With this success in place, no one should be surprised that the Venezuelan government is already looking into exploring other opportunities. It seems they have their mind set on creating a Petro Gold cryptocurrency, which will be backed by the country’s natural resources. Rather than using oil barrels again, Petro Gold will be backed by the country’s precious metal reserves. It makes a lot of sense on paper, even though it remains to be seen if this new currency will see any success.

As it happens, there are a lot of concerns surrounding this new initiative. Even though the Petro cryptocurrency is seemingly a big success already, there are still a lot of people who remain unconvinced this cryptocurrency will ever be anything but a pipe dream. Using these currencies to bypass the US sanctions imposed on the country is a very risky venture and may backfire on anyone who invests in these tokens.

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This launch comes at a rather interesting time as well. With the Petro being a success, the government seemingly assumes Petro Gold will see similar success in the coming months. This raises a lot of questions as to how easy it is for any government to create value out of thin air by creating new tokens. After all, these tokens are backed by natural resources via a promise from the Venezuelan government. It remains to be seen if the government will be able to do so when push comes to shove, though.

For the time being, there are no real details regarding the Petro Gold currency. It is evident this currency may not even have been created, yet the enthusiasm from President Maduro certainly seems to indicate this plan has been on the table for quite some time now. Gold-backed cryptocurrencies already exist, and it remains to be seen if Petro Gold will bring some competition to this market. The country is still struggling financially, and the value attributed to these tokens is completely based on good faith and speculation.

After all, there is nothing preventing people from buying gold directly without having to go through a cryptocurrency first. The gold in Venezuela is not worth any less – or more – than gold in any other country. It makes very little sense to assume this cryptocurrency will entice investors, as there is no shortage of gold out there. Rather, there aren’t enough reasons to invest in gold as of right now. Petro Gold is a very dubious project, to say the very least.

JP Buntinx

JP Buntinx is a FinTech and Bitcoin enthusiast living in Belgium. His passion for finance and technology made him one of the world's leading freelance Bitcoin writers, and he aims to achieve the same level of respect in the FinTech sector.

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