The cryptocurrency will be backed by Venezuela’s oil, gas, gold, and diamond reserves and the officials plan to overcome the financial blockade with this new project. Part of the attraction of cryptocurrencies is that their technology helps circumvent the world’s finance ecosystem by enabling trade payments in forms other than fiat currencies.
This could be a boon to the Venezuelan Bolivar, which has rapidly depreciated in the last two years. For example, the US dollar, which is typically used for global trade, had gained 10,768% against the Bolivar as of November 2017. Russia, another country that has been a subject of U.S. sanctions and is considering a national cryptocurrency, is a major trading partner to Venezuela.
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