As a Venezuelan I say this is a bad joke. They ransacked the central bank reserves, they pillaged all the gold bars in the vaults, they indebted the oil industry and there is nothing left to give as guarantee for more money. They only want to try circumvent the shitty currency they destroyed with their bad policies.<p>Stay away from this.
> “Venezuela will create a cryptocurrency,” backed by oil, gas, gold and diamond reserves, Maduro said<p>I am not sure if that’s even possible, it doesn’t make much sense. How do you link the currency to those reserves in a way that is any different to the current currency?<p>That being said, a crypto which is relatively stable could be very useful for countries with runaway inflation or other issues with the state. Both for local use and liquidity across global markets.
As whb07 said, "Its the same thing as a bond, which its feared they will default on."<p>I don't know how Venezuela expects anyone to take this seriously after they defaulted on their bond payments in November.
How ironic, an authoritarian government launching a cryptocurrency. Having said that, it'll be interesting to see how the fact that "it's backed by oil" affects it
A corrupt government that ran its economy into the ground backing a cryptocurrency. What could possibly go wrong?<p>OTOH, if someone with centuries of banking experience were to launch a well managed cryptocurrency, that could be pretty useful (Switzerland I am looking at you).<p>I would like to see a digital currency whose money supply is linked to the number of users in the system. As more users enter the system, generate proportionally more coins and vice versa. Something like this might work as a stable store of value.
Given that there are US sanctions against Venezuela, this would be an interesting case to see if digital currencies can really succeed despite the established banking system. After all, people say that necessity is the mother of invention!
It's sad that I know enough about cryptocurrency speculation to know that if they really launch this currency, there will be a willing crowd of non-Venezuelan investors likely to pour millions or even billions of USD equivalents into this. (That's assuming Maduro is informed enough to only guarantee a price floor for the currency and leave open room for upward price appreciation via speculation...)
It may be a sign of desperation, but desperation can lead people to do sensible things (and unsensible ones). A commodity-backed currency is not a bad idea (US dollar used to be backed by gold, for example), but only if they stick to it.<p>These guys are thieves and charlatans, so I expect they will devalue this currency as well when it suits them.
How can it be backed? Unless they are not allowing any mining, and merely having a currency that can be traded like a cryptocurrency. If you can mine, it would be worth something, and who would be backing that with oil? It'd be like giving away free oil.
What an embaracment that government is. This is exaclty what everybody predicted when the socialsits took over. Systematically plunder and destroy every resource to keep up the payouts to the poor and the elites.<p>Now they are reduced to third-rate schemes in the hope somebody gives them some money.<p>Remember a couple of years ago whem tons of leftist, including sanders, krugman and stigliz all talked about how create these developments were? Finally somebody that would look out for 'the people'.
Venezuela seems like a solid case for a privately-financed coup (Equatorial Guinea and Zimbabwe are there too, but in EG this was already tried and failed for stupid reasons). I don't know who they'd put in power (is there a viable opposition still?), but really anyone would be better. It's not an inherently poor country, but horribly misgoverned, and it's sad to see people suffering for decades as a result.
Weird, I just read this prediction yesterday <a href="https://www.cnbc.com/2017/12/01/james-altuchers-bitcoin-predictions.html" rel="nofollow">https://www.cnbc.com/2017/12/01/james-altuchers-bitcoin-pred...</a>
What would be the difference with that crypto stuff and just emitting some oil backed EFT ? They happen just to be either all idiots at the top of that government, which I hardly doubt; or they are just trying to hide their CCC rating to the ignorants and buzz riders.