Trump Bans The Purchase Of Venezuelan Cryptocurrency: The Petro

Pratik Makadiya

On Monday,19th March 2018,  U.S. President Donald Trump issued a prohibition order whereby the state-backed Venezuelan cryptocurrency “Petro” is deemed illegal and thus forbidding U.S. citizens from buying the Petro. The ban is in line with earlier warnings made by U.S. officials to not invest or engage in any transactions of buying or selling the Petro.

The signed executive order read:

“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.”

U.S. Executive Order

U.S. Says No To "Petro"

In the first G20 talk of 2018 for Finance Ministers and Central Bank Governors, Steven Mnuchin discussed possibilities of stabilising the Venezuelan economy, which at present is suffering from various sanctions and hyperinflation. 

Steven Mnuchin - U.S. Treasury Secretary, has been authorized to put the new order into effect immediately. In a statement, Treasury Secretary said:

“President Maduro decimated the Venezuelan economy and spurred 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.”

Treasury Secretary

 In response to the financial blockade, Venezuela’s President Nicolas Maduro publicised the plan to roll out its own cryptocurrency backed by country’s natural resources, primarily, oil. 

At the G20 meet, the Department of the Treasury also sanctioned four current and former Venezuela officials accused of being responsible for the current political crisis in the country.  

The officials include Willian Antonio Contrera - Vice-minister of Internal Commerce; Nelson Reinaldo Lepaje Salazar - Acting Head of the National Treasury; Americo Alex Mata Garcia - Alternate Director on the Board of the National Bank of Housing and Habitat; and Carlos Alberto Rotondaro Cova - former President of Venezuela Institute of Social Security.

Venezuela Attempts To Skirt Sanctions

The U.S. President Donald Trump signed the executive order as he belived the Petro as a way for the “Maduro regime to attempt to circumvent US sanctions.”

President of Venezuela, Nicolas Maduro initiated the Petro ICO with the intention of stabilizing the falling economy by raising hard currencies such as USD or bitcoin. Maduro claims to have raised over $5 billion in the pre-sale alone. 

At present, the economy is sinking deeper into inflationary troubles, while citizens are suffering to source food and medical necessities. The United States blames the Maduro regemie and believes that foreign aid has been blocked.