The country’s president Nicolas Maduro has said the cryptocurrency will help fight off the effects of US-led sanctions and is backed by the country’s oil reserves.

Speaking last week, the president said: “The centre of financial policy will be the consolidation of the Petro.

“This cryptocurrency is the future of humanity. Venezuela has entered the future.”

Venezuela’s opposition-controlled congress said the cryptocurrency was illegal because the country’s legislature has to approve any government borrowing. Maduro did not get such approval.

He said about 100m Petro tokens worth some $6bn will be issued and each token will be backed by one barrel of the country’s oil.

The country’s cryptocurrency regulator said last week it expects investors in the Petro from countries including Turkey, Qatar, the US and Europe.

Government officials hope the currency could help combat hyperinflation in the country, which the IMF has warned could spiral to 13,000% in 2018.

The IMF has also projected the country’s economy to contract 15% this year, leading to a GDP decline of nearly 50% since 2013.

Warwick Business School’s assistant professor of finance, Dr Daniele Bianchi, said: "Indeed, the very fact Petro is being backed by oil is somewhat questionable. Sure, there is a reference to the price of oil in the white paper concerning the official rate offered by exchanges.

“However, there is quite a substantial degree of subjectivity in the way the formulation for the exchange rate is settled which, if anything, it is fair to think will be used by a defaulting government at its own advantage.”