Venezeula ties its economy to petro cryptocurrency

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Venezeula has announced it will be pegging its economy to a national cryptocurrency as it looks to save itself from economic ruin.

The crisis-hit South American country, which recently saw its hyper-inflation grow to more than 1,000,000 per cent, has announced it will be tying the bolivar to the government's own petro cryptocurrency.

As part of the move, the bolivar will be devalued 96 per cent, from 285,000 to the dollar to six million. In addition, corporate tax rates will go up, as will the minimum wage. Overall, Venezuela hopes that wages, pensions and prices will all be pegged to the new currency.

Venezuela petro cryptocurrency

Announcing the news, President Nicolas Maduro said that the new "sovereign bolivar" would help the country to bounce back from its recent hardships, which he has blamed on the United States.

"I want the country to recover and I have the formula. Trust me," Maduro said on state television. "They've dollarized our prices. I am petrolising salaries and petrolising prices.

"We are going to convert the petro into the reference that pegs the entire economy's movements."

Venezeula launched its cryptocurrenncy back in February as it looked to raise cash. At the launch, President Maduro said that around 100 million petro tokens would be issued, each of which would be backed by a barrel of the nation's vast oil reserves.

However many observers warned the scheme could be a scam, with US President Donald Trump quickly signing an executive order banning Americans from investing.