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Venezuela's President Is Creating An Oil-backed Cryptocurrency

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Venezuela's President Is Creating An Oil-backed Cryptocurrency
President Nicolás Maduro is hoping the "petro" will help Venezuela get around U.S. sanctions.
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Venezuela is strapped for cash, so President Nicolás Maduro is turning to cryptocurrency.

The socialist leader said the state would issue "petros," a new cryptocurrency backed by the country's oil supply. Venezuela faces hyperinflation, political turmoil and massive debt, but has the world's largest crude oil reserves.

Maduro said the petro would help challenge the "tyranny" of the American dollar; the U.S. has imposed sanctions against Venezuela, Maduro and his political allies. The Trump administration has called Maduro a "dictator."

Maduro ordered 100 million petros be issued, backed by 5 billion barrels; Bloomberg estimates the first offer of the petro digital currency would be worth around $5.9 billion.

Late last year, Venezuela was forced to restructure parts of its roughly $140 billion in debt. It's speculated the country's central bank has only $10 billion, and up to half of that is thought to be in illiquid assets like gold.