Venezuelan President Nicolás Maduro has ordered banks to use the Petro cryptocurrency as a unit of account.
"Our country has released our first official crypto in the history of the world," said Maduro in a nationally televised event. "It’s also the only one whose value is backed by real estate. The Petro demonstrates, today more than ever, that together all is possible."
Maduro devalued the Venezuelan bolivar currency by roughly 95 percent, removing five zeroes off the old currency to launch the "sovereign bolivar," which is pegged to its oil cryptocurrency, el Petro. The plan touted as saving the economy and tackling hyperinflation, has so far paralyzed the country.
These are the strategies by the president to help end the country's struggles, and part of Maduro’s currency reform which aims to potentially stop Venezuela’s economic collapse.
According to a resolution of the Sudeban banking regulator, public and private banks must reflect all financial information in bolivars and Petros.
And also part of Maduro's attempts to steer out of five years of recession and inflation, Venezuelan economic plans also include a 3,400 percent increase in the minimum wage and a hike in gasoline taxes, which for years have been the world's cheapest.
Separately, Maduro also launched an offer of bonds backed by small gold bullion. He said that it would help Venezuelans who are affected by the hyperinflation.
"No one can say that gold loses its value," Maduro said.
Many people in the international community think that the Petro and the new sovereign bolivar won't save Venezuela. One said that Maduro's plan is "like a fireman has a plan to pour gasoline on fire. The sovereign bolivar is combustible."
Linking the new sovereign bolivar to the Petro is a "scam", because the oil-backed cryptocurrency is "dysfunctional and non-existent."
That authorization has also led to protests from unions, which say Maduro is abusing his power. Servando Carbone, the national coordinator of the National Federation of Public Sector Workers, said the Bitcoin alternative "is an invention of the government to launder drug money."
But still, Venezuela is confident with Maduro's plan.
The oil-backed cryptocurrency Petro has raised $735 million in its first day, despite investor warnings.
Until this time, Venezuela experienced its highest ever inflation rate, when prices for goods and services rising by at least 82,766 percent.