Venezuela is replacing its national currency, the bolivar, with a new one that will reportedly be tied to its controversial “petro” token.
The new (or sovereign bolivar) is to enter use in the country next month, according to an announcement on Wednesday from the country’s president, Nicolas Maduro.
As well as stating that the sovereign bolivar will be “anchored” to the oil-backed petro – which was launched in February – Maduro said the country will strip five zeroes from the bolivar rather than three as had been initially planned, Reuters reports.
The move is aimed to counter soaring inflation that is expected to reach a million percent this year, the article states.
According to local news source teleSUR, the president said:
“The economic reconversion will start on August 20 definitively with the circulation and issuance of the new Sovereign Bolivar, the new monetary cone [sic] that is going to have a new method of anchoring the Petro.”
Stating that the new currency will alter the financial situation of the country “in a radical manner,” Maduro said, “We have the correct vision of what the economic future in Venezuela should be, above all, we will achieve it.”
The petro, he added, “will end up being consolidated technologically and financially” and will come to “permeate all the national and international economic activity.”
Despite being declared as “illegal” by the opposition-led congress before its launch, the crypto token has been moving ever further into the heart of the nation’s finances as the president has endeavored to ensure its use across society.
In February, he requested the country’s banks to mine and use the petro, and ordered several state-owned companies to convert a percentage of their sales and purchases into the token, among other initiatives aimed to promote its uptake.
Maduro originally stated that approximately 100 million petro tokens (worth a claimed $6 billion) would be issued to overcome the financial sanctions imposed by the U.S. In March, the U.S. responded, with Donald Trump signing an executive order imposing new sanctions against Venezuela over the token.