Malaysia and Venezuela Launch Digital Currencies

A Malaysian company announced that it has received a Sharia license to operate with a gold-backed digital currency and can introduce an Islamic digital currency to the market. The Venezuelan government also announced that it will officially implement a digital currency backed by oil. The Malaysian company 'Hello Gold' announced on Wednesday, February 21, that it has received a Sharia license to produce this digital currency and will launch this Islamic digital currency in Thailand this year. This digital currency, named 'Goldex', was introduced to potential customers last year. Islamic financial consultants from the Malaysian company Amanah issued the Sharia license for this digital currency. The difference between Goldex and other digital currencies is that for each currency unit, an equivalent amount of gold is held in a fund in Singapore, and any financial transaction must be based on a specific timeline. This report indicates that under these conditions, Goldex can both validate financial resources and ensure transparency in transfers, which are both conditions of Islamic commercial contracts. This move also indicates the efforts of digital currency companies to approach the markets of the Middle East and Southeast Asia and to integrate them into this market. Hello Gold stated that after Malaysia and next month in Thailand, it will also implement its digital currency market in a third country this year. Venezuela and the state-backed digital currency 'Petro' Venezuela announced on Tuesday, in an unconventional move, that it will begin trading with a digital currency backed by crude oil to improve its economic situation. Venezuela, as the first government to offer a state-backed digital currency, stated that 38.4 million units of 'Petro' are ready and available for pre-sale. This report indicates that the pre-sale of this oil-backed digital currency is scheduled for March 19 – one month from now. Nicolás Maduro, the President of Venezuela, also stated that the Petro currency will help 'Venezuela's independence from the clutches of foreign powers that are trying to suffocate Venezuelan families to access their oil'. One hundred million Petro will be sold at a value of $60 per unit – based on the price of Venezuelan oil in January of this year. An economic expert told Agence France-Presse that during the 'pre-sale', the price of the digital currency is privately agreed upon. However, after that, on March 20, with the release of 44 million Petro, the market and competitive power will play a role in determining its value. Meanwhile, the Venezuelan government is holding 17.6 million Petro in its foreign reserves. This country, which has the largest known oil reserves in the world, is facing a severe economic and political crisis. Nicolás Maduro stated a few months ago that Venezuela, facing sanctions from the US and the EU, is moving towards offering a digital currency. He expressed hope that the Petro digital currency would open new ways to secure funding and escape US sanctions. Economic experts have expressed doubts about the success of Venezuela's digital currency unit, as the country faces deep economic turmoil that undermines confidence in the new currency. The financial consulting group 'Eurasia' predicted that although Venezuela could receive nearly $2 billion in its initial offer for Petro, it is unlikely that this digital currency unit will have long-term credibility in global markets. Venezuela is facing a serious economic crisis in the shadow of falling crude oil prices and declining production. Crude oil constitutes 96% of Venezuela's exports. The Venezuelan government is also facing challenges in paying foreign debts, which some experts estimate to be close to $150 billion.