Shortly after launching the pre-sale of its national cryptocurrency, the government of Venezuela has announced that it will introduce a cryptocurrency called “Petro gold.”
“Next week I’m going to launch the petro gold, backed by gold, which is even more powerful, that will strengthen the petro,” Reuters quoted President Nicolas Maduro as saying in a televised speech on Wednesday.
It will be backed by precious metals such as gold.
Gold-backed cryptocurrencies already exist in other parts of the world.
The decentralized Singapore-based DigixDAO stablecoin system, the Perth Mint’s own cryptocurrency, and Britain royal mint’s RMG are supported by gold.
The news of Petro gold comes a day after Maduro launched the pre-sale of El Petro (PTR), the first national cryptocurrency in the world, to ease the country’s economic crisis, and circumvent U.S.-led sanctions.
Maduro claimed that Petro pre-sale evoked overwhelming response on the first day.
The government says Petro can be used as a form of payment for a number of services and commercial transactions, as an alternative to the country’s devalued hard currency.
Venezuela’s economy has been reeling under pressure of the US sanctions, falling oil revenue and the plunging value of its currency, the Bolivar.
Venezuela, which has the world’s largest proven oil reserves, has allocated 5342 million barrels of oil in the Ayacucho Block of the Orinoco Oil Belt to back Petro.
The impoverished Latin American country has options such as gold reserves in the central bank or undeveloped mineral deposits in front of it to back “Petro Gold”.
Meanwhile, Maduro’s Petro gold idea coincided with opposition parties’ call to boycott the presidential election in April, saying the electoral system was rigged in favor of the President.
The decision paves the path for Maduro’s easy re-election, and consolidation of power, political analysts say.