According to the economic plan for Venezuela to mitigate the hyperinflation, the Central Bank has reduced rates on five zeros. Another key step was the issuance of a new currency called “sovereign Bolivar”. Its peculiarity is that it’s the world's first national currency, pegged to a cryptogram. Namely — to the oil-backed cryptocurrency el Petro, which Maduro launched in February this year as an ERC-20 token.
The launch of a new fiat currency is a part of Maduro's strategy to combat hyperinflation. According to the forecasts of The International Monetary Fund, it will reach 1 000 000% by the end of this year. The IMF also predicts the economic decline of 18% due to a significant decline in oil production.
Many critics consider this step to be another failure of the socialist policy, which will only further lead the already lost country into crisis. And there are real reasons for that. The cryptocurrency was supposed to protect the fiat currency at the time of the economic crisis and help the country avoid financial sanctions from the United States, but now it is not even traded and, moreover, is regarded by most world experts as a scam. The crypto rating site ICOindex.com confirms this and gives el Petro a scam label.
In addition, the Venezuelan Parliament, led by the opposition party, calls the trade in cryptocurrency “unconstitutional” and considers it to be a way of the illegal pledge of the country's oil reserves.