Venezuela’s national oil-backed cryptocurrency, the Petro (PTR), has been scathingly denounced as an opaque “stunt” backed by a centralized and debt-saddled entity, the Wired reports today, August 22.

Amid rampant hyperinflation in the Venezuelan economy, President Nicolas Maduro has this week introduced a rebranded fiat currency – the sovereign bolívar – which will have five fewer zeros than its ailing predecessor, the Bolívar Fuerte (VEF).

The new currency has in turn been anchored to the Petro, which is now valued at $60 or 3,600 sovereign bolivars. The plan effectively devalues the bolívar (VEF) from 285,000 per dollar to 6 million – a drop of 96 per cent.

“They’ve dollarized our prices. I am petrolizing salaries and petrolizing prices,” Maduro said on state television on Friday night. “We are going to convert the petro into the reference that pegs the entire economy’s movements.”

“I know when you turn love into politics miracles can happen,” he added. But as Jorge Farias, CEO of Venezuelan startup Cryptobuyer, told the Wired:

“One Petro is supposed to get you $60 or 3,600 sovereign bolívars. It’s supposedly backed by oil barrels produced by the national oil company PDVSA; the catch: PDVSA also has debts amounting to $45 billion. And in real life, the Petro – crypto or not – doesn’t exist at all. We have not seen a single Petro circulating, nor its smart contracts, or rules of the token, and much less its blockchain.”

Roger Benites, CEO of Lima-based crypto exchange BitInka, said he believes Maduro is using blockchain technology and the Petro as a “smoke curtain” to superficially distance his actions from the earlier, failed fiat redonimation of former president Hugo Chavez.

“[The situation] is just plain nonsense, backing up a fiat currency with a cryptocurrency tied to the barrels of oil from an entity that has an external debt they cannot pay,” he said.

Maduro has recently stated that the Petro will serve as a unit of account and has already presented it as a panacea for everything from homelessness to youth unemployment. The government launched the pre-sale of the Petro in February, and the ICO has already – allegedly – raised over $3.8 billion. As Corre Innovation’s Dickie Armour told the Wired:

“It may be a stunt, but a stunt that is working. The question is though – working for whom? President Nicholas Maduro and his cohorts? Or the people of Venezuela? Sadly, it’s more likely to be the former.”

Two other sanction beset-governments, Russia and Iran, have also indicated they are considering the benefits of creating their very own state-issued cryptocurrencies.