(CNBC)– A pre-sale of Venezuela’s new “petro” cryptocurrency will begin on Feb. 20, President Nicolas Maduro said on Tuesday, a move that the government hopes will help pull the country out of a dire economic crisis.
Critics have slammed the initiative as not only illegal but nothing more than a debt issuance by the government amid quadruple-digit inflation and major shortages.
Maduro has previously said Venezuela will issue 100 million tokens, each valued at — and backed by — the equivalent of one barrel of Venezuelan crude.
That would put the value of the entire petro issuance at just over $6 billion.
“All the cryptocurrencies of the world have been revalued after Venezuela’s announcements about the creation of the petro,” said Maduro in a speech broadcast on state television.
Venezuela is seeking to raise hard currency amid a crippling crisis.
The government has said that the petro issue will help the cash-strapped country make financial transactions and overcome U.S. sanctions against Maduro’s socialist government.
However, the United States earlier this month warned investors curious about the petro, saying dealing in it may contravene sanctions because “the petro digital currency would appear to be an extension of credit to the Venezuelan government.”
The country’s opposition said it is illegal to use oil reserves – of which Venezuela has the largest in the world – to issue debt.
A document by advisers reviewed by Reuters two weeks ago recommended the government sell $2.3 billion in a private offering, with up to 60 percent discount, in mid-February.
The price of one bitcoin, a bellwether for the cryptocurrency market, has fallen significantly in the last month.
Raising concerns about the security of virtual currencies, hackers made off with more than half a billion dollars from a Tokyo-based exchange late last week.