President Maduro just announced a cryptocurrency to be backed by the Venezuelan oil, gold, and diamonds reserves. The act was justified as a way of overcoming American financial blockades and stop American attempts of ending socialism in Latin America.
In a single move, the digital currency entered the realm of realist politics and the realm of oil extraction. We learned at this blog about the technicalities and peculiarities of these currencies (here and here). One of these is the lack attachment to any real value reserve mediated by banks. The value is ensured by the block chain, “the source of truth”, which makes it very robust to inflation driven by unhealthy monetary policy. In fact, many Venezuelans were acquiring cryptocurrencies exactly to avoid uncertainty created by domestic hyperinflation. If one makes it about oil and politics, tough, it is not that simple.
The acclaimed Venezuelan anthropologists, Fernando Coronil, argues that the country “was seen as having two bodies, a political body made up of its citizens and a natural body made up of its rich subsoil”. Historically, he contends, state authority was attained and built by an “ensemble of practices, institutions, and ideologies of rules” related to oil. The state emerged from oil and oil emerged from the state, as if by magic, bringing the two bodies together.
In times of diminishing support for Maduro, dovetailing the “future” in form of cryptocurrency with the “past” in form of Venezuelan oil wealth, can be interpreted as an attempt of increasing legitimacy. Magically, it does not matter much that adding an intermediary arguably makes the underlying blockchain technology much less disruptive. I wonder what Coronil would have to say about this.
 Page 4, Coronil, Fernando. The magical state: Nature, money, and modernity in Venezuela. University of Chicago Press, 1997.