Venezuelan President Nicolas Maduro has unveiled a national currency which will be directly tied to the oil-backed petro cryptocurrency. The new Bolívar Soberano is set to be launched on August 20 this year, replacing the Bolivar Fuerte. It is believed that the Venezuelan leader has opted for the move in an attempt to battle hyperinflation.
This seems to be the first time a fiat currency will be leveraged against a cryptocurrency as opposed to the other way around, like with tether or EURS stablecoins. According to the president, this move is set to "stabilize and change the monetary and financial life of the country in a radical manner”.
WHY IS IT IMPORTANT?
1. Inflation figures for Venezuela varied, as some estimate it to reach 1,000,000% towards the back of 2018, which would showcase similar conditions to post WWI Germany or Zimbabwe form 10 years ago.
2. Petro cryptocurrency has proven to be unpopular since its launch in February 2018 since it’s almost impossible to purchase. The currency is also banned in the U.S.