In recent unfolding of events, President of the US Donald Trump has banned purchases of Petro, a cryptocurrency being rolled out by Venezuelan government to circumvent sanctions. Last December, Venezuelan President Nicolas Maduro gave a statement in which he pledged to create a Bitcoin-like national currency to forestall the financial bans and head toward new methods of international financing for the economic and social development of Venezuela.
United States Secretary of the Treasury, in a statement to the press, said:
“President Maduro decimated the Venezuelan economy and spurred a humanitarian crisis. Instead of correcting course to avoid further catastrophe, the Maduro regime is attempting to circumvent sanctions through the Petro digital currency – a ploy that Venezuela’s democratically-elected National Assembly has denounced and Treasury has cautioned U.S. persons to avoid.”
This move doesn’t come as a surprise as United States authorities have already raised their concerns over the introduction of Petro and how it would undermine US sanctions imposed on Venezuela. According to the US Treasury, Petro could put US citizens at legal risk since making an investment in Venezuelan currency can potentially conflict with US sanctions against the country.
On the other hand, the popular cryptocurrency Bitcoin price has seen considerable gains as BTC value rose up to the high of $8,700 after having a terrible weekend that saw cryptocurrency’s price plummet down to a low of $7,300.
President Trump banned the Venezuelan cryptocurrency through the issuance of an executive order. The first section of the order reads:
“All transactions related to, provision of financing for, and other dealings in, by a United States person or within the United States, any digital currency, digital coin, or digital token, that was issued by, for, or on behalf of the Government of Venezuela on or after January 9, 2018, are prohibited as of the effective date of this order.”
Just for the context, the South American country launched Petro back in February 2018 which allegedly raised around $735 million if Maduro’s tweet is to be believed. According to many analysts the figure seems dubious and it is merely an effort to bypass US and EU sanctions against the country. It should be remembered that Venezuelans national currency, bolivar’s, value is in tatters because of hyperinflation and currently a bolivar is worth only $0.00003. It would be interesting to see how this ban affects Petro that hasn’t gotten off the ground yet.