The Venezuelan bolivar is planned to be revived through Petro

Venezuela is seeking to end once and for all the hyperinflation that has virtually destroyed the bolivar, forcing the government to create a new currency - a sovereign bolivar, which will be pegged to the Petro cryptocurrency. The country's President Nicolas Maduro announced the release date of the new currency - August 20 - and said that the country needs an “economic revolution.”

In fact, it's the other way around. Venezuela has suffered from hyperinflation since 2013, driven by a collapse in oil prices and macroeconomic imbalances that led to an economic crisis. According to Maduro, the country has become a victim of an “economic war” waged against it by the United States. In April, Maduro was elected for another six years, with the United Nations and European Union calling the election results fraudulent.

The Bolivar's inflation rate could reach 1,000,000% this year, according to the International Monetary Fund, and Venezuela's GDP is expected to fall another 18%. “The situation in Venezuela is very similar to Germany in 1923 and Zimbabwe in the late 2000s,” the IMF report says.

The “revival” of the bolivar was met with a barrage of criticism. Venezuelan economist Asdrubal R. Oliveros wrote on his Twitter:

"The sovereign Bolivar is tied to the Petro. Simply fantastic. This token rests only on trust. No one trusts the Bolivar, no one trusts the Petro."

Professor Louis Vincente Leon wrote on Twitter:

"Petro is a currency without a corresponding circulation, it has no trust of market participants, it is prohibited by large economies. Tying the bolivar to Petro is tying nothing to anything."

Earlier in February of this year, Maduro announced that 100 million Petro tokens would be sold for more than $6. billion The US Treasury recommended its citizens to refrain from purchasing. The price of the token dropped from its original price of $60 to $16.70. 

According to the New York Times, one dollar can currently be bought for about 3.5 million bolivars on the Venezuelan black market. Due to the consequences of hyperinflation and food shortages, residents are increasingly resorting to barter and receiving wages in kind. Hundreds of thousands of people fled to neighboring countries.