Venezuela’s president is determined to bring some form of cryptocurrency to his economically ravaged country, and his most recent idea to do so leads to OPEC.
Nicolas Maduro announced this week that he wants OPEC nations to jointly develop a platform to trade oil-backed cryptocurrencies. He wants to present an official proposal to all OPEC members and non-OPEC states.
Reaching out to OPEC
Not many details were given by Maduro about how he plans to get OPEC countries, or anyone else for that matter, on board to create a crypto with him. He reportedly made the statements Tuesday after meeting with OPEC’s Secretary General of the Organization Mohammed Barkindo.
“I will officially propose to the OPEC and non-OPEC countries that we adopt a joint cryptocurrency mechanism backed by oil.”
One of the things his proposal calls for relates to the regime of oil production cuts, which operates within the deal between OPEC and non-OPEC members, according to Sputnik News.
"I want the Joint OPEC-Non-OPEC Monitoring Committee to operate for at least five more years as we have already had great achievements."
Love affair with cryptos, or something else?
As Venezuela’s economy continues to spiral downward towards becoming a failed state, Maduro keeps pushing for some form of crypto to provide the saving grace. He’s enamored with them and he is even pushing for the country to create its own crypto that would be backed by the country’s oil, gas, gold and diamond riches. He’s named it Petro.
Whether or not the country’s creation of its own crypto can help its economy is doubtful, according to many observers. Many see Maduro’s elaborate Petro plan as a political stunt. It’s been noted that he has gotten the reputation of announcing elaborate ideas just for the cheers, knowing full well the likelihood of them coming to fruition is low.
It was just in December that Maduro announced his plans for the Petro. At the end of January, we told you how he appeared to be pushing ahead with the project, despite many objections. He announced a pre-sale of 100 million units worth around $6 billion. The country has allocated five billion barrels of oil to back its cryptocurrency.
As Maduro heads full steam ahead with his plans, he’s ignoring the fact that the country’s Parliament has ruled against them. Last month we told you about legislator Jorge Millan not supporting the plan.
Millan was quoted by Reuters as saying:
“This is not a cryptocurrency, this is a forward sale of Venezuelan oil. It is tailor-made for corruption.”
The parliament also warned all investors in the Petro that the digital currency will not be honored after the incumbent President’s term ends.
Another problem with Maduro’s crypto plans is his choice to back it with the country’s oil. That could be a problem because of the United States, which is threatening to ban the country’s oil imports. This would further cripple Venezuela’s economy. U.S. Secretary of State Rex Tillerson said this week:
"Obviously sanctioning the oil, or in effect prohibiting the oil to be sold in the U.S. is something we continue to consider.”
The logic is that by doing so, Maduro will feel the pressure to restore the country’s Constitution and hold free and fair elections.
Maduro’s OPEC crypto idea comes as governments around the world continue to criticize him for his handling of his country’s governmental affairs. The situation is only aggravated by the near economic ruin the country finds itself in as the prices of basics like food and medicines have skyrocketed. The financial toll on the country’s citizens has been extreme.
It’s going to take more than crypto to save Venezuela.