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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: 501097

Reported Deaths: 9990
CountyCasesDeaths
Harrison34338538
DeSoto32117403
Hinds31939628
Jackson24494382
Rankin21995390
Lee15543235
Madison14581280
Jones13851242
Forrest13453251
Lauderdale11991317
Lowndes11050188
Lamar10521135
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Hancock7732127
Washington7438158
Oktibbeha7146131
Monroe6777177
Warren6694176
Pontotoc6664102
Neshoba6637206
Panola6531131
Marshall6467134
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Union602894
Pike5820152
Alcorn5669101
Lincoln5436135
George496879
Scott472898
Tippah469281
Prentiss467281
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Itawamba4636105
Tate4588111
Adams4587119
Copiah448592
Simpson4446116
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Winston314291
Clay308076
Chickasaw300367
Clarke292494
Calhoun279446
Holmes267987
Smith264050
Yalobusha234047
Tallahatchie228051
Greene219348
Walthall218763
Lawrence212940
Perry205556
Amite205156
Webster202946
Noxubee186740
Montgomery179656
Jefferson Davis171743
Carroll169138
Tunica159839
Benton148838
Kemper141941
Choctaw133426
Claiborne132737
Humphreys129538
Franklin120228
Quitman106428
Wilkinson105139
Jefferson94534
Sharkey64120
Issaquena1937
Unassigned00

Alabama Coronavirus Cases

Cases: 819597

Reported Deaths: 15406
CountyCasesDeaths
Jefferson1147901924
Mobile725791338
Madison52306697
Shelby37597350
Baldwin37245552
Tuscaloosa35101612
Montgomery34106740
Lee23526246
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Etowah19825500
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St. Clair16054339
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Limestone15343199
Elmore15241286
Lauderdale14302295
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DeKalb12649261
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Autauga10043148
Jackson9871184
Coffee9210191
Dale8897185
Colbert8860201
Tallapoosa7084198
Escambia6772134
Covington6712183
Chilton6641162
Russell636659
Franklin5959105
Chambers5607142
Marion5005127
Dallas4973200
Pike4795106
Clarke475584
Geneva4571127
Winston4516103
Lawrence4321117
Bibb425186
Barbour357776
Marengo338090
Monroe331464
Randolph329764
Butler326396
Pickens316284
Henry312666
Hale311388
Cherokee302860
Fayette292880
Washington251551
Cleburne247760
Crenshaw245275
Clay243368
Macon234663
Lamar224147
Conecuh186153
Coosa180240
Lowndes175164
Wilcox168839
Bullock151644
Perry138840
Sumter133038
Greene126744
Choctaw88527
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