Venezuelan President Nicolas Maduro has announced that the new national currency, backed by encoded currency, will begin trading on August 20, local news agency Telesor reported on July 25.
The new currency, Bolivar Supirano, will have five zeros less than the current national currency, Bolivar Fuerte (VEF), and will be based on the oil-backed Petro-Petro (PTR) currency, Telesor said. Petro was launched by the Venezuelan government in February.
Maduro pointed out that this measure aims to harmonize the country's financial and monetary system "in a radical way", noting that the reintegration and consolidation of Petro is "a great hope" to develop a "productive, diversified and sustainable economic model."
The president also said the measure could help inflation and lack of cash, as well as easing long lines on ATMs that have become routine for Venezuelans.
Maduro expressed his confidence in Petro, saying that the state-backed digital currency "will eventually be technologically and financially integrated" and will include "all national and international economic activity."
In the meantime, a number of financial experts criticized the conversion process, where the economist Maxim Ross claimed that this procedure "does not solve anything," according to 10 local news in March.
Opposition MP and economist Angel Alvarado spoke critically about the move, telling CNBC that "taking zeros from the money does not repair anything" and inflation will not actually resist the economy.