The way Venezuela has mismanaged its currency is one of the best advertisements for digital currencies that seek to replace fiat money issued by governments. A prudent citizen of that country would have protected his wealth better by holding a digital currency rather than the Venezuelan bolivar. Now, Venezuelan President Nicolas Maduro has said that his country will launch its own cryptocurrency, backed by the ample reserves of oil, gold and diamonds that his country has. Maduro says this new currency will help Venezuela bypass the sanctions that the US has imposed.

There is rich irony in the fact that the two libertarian monetary dreams — of digital currencies outside the control of regulators and currencies backed fully by commodities such as gold—are now being used by a regime that has destroyed its national economy through a combination of statist controls and fiscal profligacy funded by printing new money. This is perhaps on par with Zimbabwe’s decision to use the US dollar as legal tender to bring monetary stability after many years of hyperinflation.