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Venezuela tries a cryptocurrency to solve its economic crisis

Venezuelan leaders face an unprecedented economic crisis, and their currency is almost worthless.So they creat...

Posted: Feb 20, 2018 3:27 PM
Updated: Feb 20, 2018 3:27 PM

Venezuelan leaders face an unprecedented economic crisis, and their currency is almost worthless.

So they created a new one.

Venezuela's government on Tuesday launched the world's first sovereign cryptocurrency, the petro, to help its collapsing economy. Presale began with one token going for $60. The government is trying to sell $2.3 billion worth.

Theoretically, the petro is backed by Venezuela's reserves of precious metals like gold and crude oil. The country has the largest crude oil reserves in the world. The petro does not give investors any ownership stake in Venezuelan oil.

Some investors say it's innovative nonetheless, and could draw investment from Middle East, Europe and Asia. But many economists argue that the petro won't solve Venezuela's many problems, including food shortages, plummeting oil production and a mass exodus.

Venezuela owes bondholders, oil companies, airlines, China, Russia and other creditors about $141 billion, according to a report last fall by Moody's Investor Service. The government has been in default on some of its debt since November.

Related: Venezuela's cash crisis: You can't get $1 out of the bank

President Nicolas Maduro blames the United States and Western institutions for waging "economic war" against Venezuela. President Trump and several other Western leaders call Maduro's regime a dictatorship.

It's unclear how much demand the petro will draw. The U.S. Treasury Department warned in January that investors who buy the cryptocurrency "may be exposed to U.S. sanctions risk."

In August, the Trump administration hit the Maduro regime with financial sanctions that prevent any bondholders with business in the United States from buying new Venezuelan government bonds.

It's also unclear how investors will be able to sell the petro. For now, investors have to buy it with other world currencies. They can't buy it with Venezuela's official currency, the bolivar, which is worth nearly nothing because of hyperinflation.

Related: 'Death spiral': 4,000% inflation in Venezuela

The United States, Europe and other global critics of Maduro may increase the pressure soon to force him to leave or adopt democratic reforms. Maduro's administration has called for a presidential election on April 22, but no opposition leaders are allowed to participate.

Secretary of State Rex Tillerson said on a recent trip to Latin America that the United States is considering a ban on Venezuelan oil, the only viable source of income for Maduro's government.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 333180

Reported Deaths: 7502
CountyCasesDeaths
DeSoto22901279
Hinds22780438
Harrison19569326
Rankin14851287
Jackson14342251
Madison10692227
Lee10437179
Jones8746169
Forrest8210157
Lauderdale7561243
Lowndes6790150
Lamar669688
Lafayette6459124
Washington5516139
Pearl River4915149
Bolivar4909134
Oktibbeha478498
Panola4723112
Marshall4654106
Warren4640127
Pontotoc440473
Monroe4255137
Union425379
Neshoba4182180
Lincoln4098115
Hancock405088
Leflore3565125
Pike3530112
Tate349588
Alcorn343974
Sunflower343093
Adams333387
Scott331775
Yazoo331173
Simpson314890
Copiah313867
Itawamba310180
Coahoma308785
Tippah298868
Prentiss292963
Covington282483
Marion279580
Leake278475
Wayne270743
Grenada266388
George261651
Newton256664
Tishomingo236869
Winston235584
Jasper226148
Attala220873
Chickasaw216360
Stone210237
Holmes195674
Clay192254
Clarke182080
Tallahatchie181742
Calhoun177532
Smith175935
Yalobusha169440
Walthall141548
Lawrence137726
Greene135734
Amite132843
Noxubee131635
Perry131038
Montgomery130944
Carroll124531
Webster117532
Jefferson Davis113334
Tunica111127
Benton104625
Claiborne104331
Kemper100729
Humphreys99133
Franklin85923
Quitman83519
Choctaw81319
Wilkinson74632
Jefferson69728
Sharkey51518
Issaquena1696
Unassigned00

Alabama Coronavirus Cases

Cases: 570667

Reported Deaths: 11483
CountyCasesDeaths
Jefferson834821584
Mobile45819855
Madison36785532
Tuscaloosa26757465
Shelby26612255
Montgomery25739624
Baldwin23810325
Lee16801181
Calhoun15130332
Morgan14941289
Etowah14662368
Marshall12806235
Houston11515292
Elmore10654217
St. Clair10521251
Limestone10472158
Cullman10257204
Lauderdale9991253
DeKalb9298191
Talladega8739187
Walker7594286
Autauga7419113
Jackson7269117
Blount7184139
Colbert6583142
Coffee6045131
Dale5326117
Russell465842
Chilton4645117
Covington4579125
Franklin444381
Tallapoosa4379157
Escambia420082
Chambers3852125
Dallas3688163
Clarke364462
Marion3380106
Pike324879
Lawrence3192101
Winston291072
Bibb280165
Geneva271583
Marengo258567
Barbour243461
Pickens239162
Butler236172
Hale231878
Fayette224564
Henry205145
Randolph194944
Cherokee193948
Monroe192141
Washington177139
Macon167552
Crenshaw164458
Clay162559
Cleburne159145
Lamar149538
Lowndes144354
Wilcox129231
Bullock125642
Conecuh118130
Coosa116029
Perry109928
Sumter108032
Greene97836
Choctaw63825
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