Venezuela’s President Nicolas Maduro said on state television that Venezuela would put in place in 2019 a program to sell all its oil production in the Petro cryptocurrency, which the leader is touting as the first state-backed oil-backed digital currency.

Gradually, Venezuela will sell all its oil production in Petro, Maduro said during a visit to Russia. For 2019, Venezuela will have a timetable to sell all its oil production in the cryptocurrency, its president said. In this way, Venezuela will free itself from the currency used by Washington “to create economic pain” to other countries, and to “persecute countries, as it does with Venezuela, Cuba, Iran, and Russia”, Maduro said.

El Petro, however, is seen by analysts and experts as nothing but a scam and another effort by Venezuela to skirt sanctions and mask the inability to overhaul the ailing domestic economy.

According to the International Monetary Fund (IMF), Venezuela’s economy will collapse by 18 percent this year, while inflation is expected to be at 1,370,000 percent.

Over the past months, Maduro has been touting a new plan for economic recovery, which includes a new policy on gasoline pricing that would raise Venezuela’s ultra-cheap gas prices for the first time in two decades. The plan to ease the severe economic crisis also featured a devaluation of the currency and pegging the new bolivars to the Petro.

Maduro claims that the Petro is strengthening his recently announced economic overhaul plan and will “revolutionize” the global crypto economy with a new form of trade, finance, and monetary exchange.

Experts and analysts are skeptical that the Venezuelan cryptocurrency is really backed by oil assets and minerals.

“Reaction from the cryptocurrency community has been a mixture of dumbfoundedness and anger,” Alex Tapscott from the Blockchain Research Institute told the BBC.

According to Tapscott, there isn’t any proof at all to back up Venezuela’s claim that each unit of the Petro is backed by oil.

By Tsvetana Paraskova for Oilprice.com

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