Venezuela’s President Nicolas Maduro lopped off five zeroes from the bolivar and unveiled a new currency to try to put a muzzle on the country’s skyrocketing inflation.

But that’s not all. This new sovereign bolivar’s backed by a government cryptocurrency called the petro. Which, if you ask the parliament, has been illegally used to mortgage Venezuela’s oil reserves.

About that petro…
Maduro introduced it back in February as a way of raising cash as the economy tanked. He said each petro would be backed by a barrel of Venezuela’s crude reserves (FYI, Venezuela’s a major oil exporter, but production hit a multi-decade low back in June).

Maduro then claimed the petro initial coin offering (ICO) raised $735 million (though there’s not much evidence to back him up). The opposition-led parliament’s response? The petro sale was “unconstitutional.”

Fast forward to today, and many are skeptical…at best
Maduro has said the goal is to peg wages, pensions, and prices to the petro (which equals $60, or 3,600 new sovereign bolivars) and create a single floating exchange rate. But…

• ICOindex.com (a crypto site that rates ICOs) labeled the petro a “scam.” If that wasn’t bad enough, fellow reviewer ICObench gave it a 1.6 rating out of 5…which makes Bananacoin (3.2 rating) look like the U.S. dollar.
• Johns Hopkins applied econ professor/hyperinflation guru Steve Hanke: “I’ll believe it when I see it…the problem with the petro is it’s a scam, it doesn’t even trade,” per CNBC.

https://www.morningbrew.com/stories/venezuela-has-a-new-crypto-backed-currency