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Venezuela to Launch Cryptocurrency to Fight US Sanctions

Venezuela's President Nicolas Maduro holds a 100,000 bolivar note while speaking with ministers in Caracas, Nov. 1, 2017.

Venezuelan President Nicolas Maduro says his government will launch a cryptocurrency, or digital currency, to circumvent what he called a financial "blockade'' by the U.S. government.

The new currency will be called the "petro," the leftist leader said in his TV address Sunday. It will be backed by the socialist-run OPEC nation's oil, gold and mineral reserves.

That will allow Venezuela to advance toward new forms of international financing for its economic and social development, Maduro said.

"Venezuela will create a cryptocurrency – the petro-currency, the petro – to advance in monetary sovereignty, to make its financial transactions, to overcome the financial blockade," he explained. "This will allow us to move toward new forms of international financing for the economic and social development of the country. And it will be done with a cryptocurrency issue backed by reserves of Venezuelan riches of gold, oil, gas and diamonds."

Maduro did not give any details what the new currency's value will be, how it will work or when it will be launched.

The government also announced the creation of a "blockchain observatory" software platform for buying and selling virtual currency.

Opposition leaders objected to Maduro’s announcement, saying the currency would need congressional approval. Some questioned whether the digital currency would even be introduced in the midst of turmoil.

Venezuela's traditional currency, the bolivar, has significantly declined in recent weeks as U.S. sanctions make it harder for the country to stay current on its foreign debt.