Donald Trump Sanctions Venezuela’s Petro Moneda
This Monday, March 19, U.S. president Donald Trump imposed new sanctions on Venezuela’s Petro cryptocurrency by signing an executive order.
According to Bloomberg, the American president was already preparing the executive order with extra sanctions on Venezuela for trying to circumvent US-led trade restrictions. Early this week, the White House announced Trump was finally placing extra sanctions on Venezuela in order to prevent any U.S.-based transactions in the Petro.
According to the executive order,
“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.”
Notably, this executive order is the first concrete action that the U.S. government has taken against the Venezuelan cryptocurrency.
The Venezuelan “Petro Moneda”
Back in February, Venezuelan President Maduro announced it was launching the country’s first cryptocurrency backed by its mineral and oil reserves. The international community immediately accused Maduro of launching the cryptocurrecny as a workaround to circumvent international sanctions. According to Maduro, the Petro Token has already brought the country about $5 billion in investment, right after the Token’s pre-sale. Despite a lot of interest shown in the Venezuelan crypto token, up until now, there is no evidence to support this claim.
The U.S. Reaction
It was inevitable that the U.S. administration would make a “counter-attack” on President Maduro’s move, and as so, the new sanctions implemented early this week by Donald Trump were not surprising at all.
Soon after Maduro’s announcement, several U.S. lawmakers came forth to criticize the Venezuelan cryptocurrency. According to CBS News, senators Bill Nelson, Marco Rubio and Bob Menendez contacted the Treasury Department and questioned how American investors could be protected and how could the U.S. prevent Venezuela from finding an alternative financial support. All the three Senators stressed that the Petro “could have significant national security implications for critical energy infrastructure in the United States.”
Senator Bob Menendez stated:
“As the Venezuelan regime spirals out of control, this bipartisan legislation represents our resolve for the United States to speak unequivocally in our rejection of the abhorrent state of affairs in Venezuela and its potential destabilizing impact in our hemisphere.”
Maduro’s cryptocurrency not only received a negative reaction from the U.S. but also from within its country borders as the Venezuelan Congress considered the Token as illegal and unconstitutional.
The order clearly bans US businesses and citizens from engaging in any activity related to Venezuela’s Petro.
According to Aljazeera, the Venezuelan administration considered the U.S. government’s move as “gross meddling and tantamount to new imperial aggression against its financial and economic system”.
Since November last year, the South American country has been in an economic depression and has not been able to cope with its foreign debt and its foregoing repayment to its bondholders. To face this terrible situation, Maduro devised the Petro, as a way of bypassing sanctions and channeling foreign investments to the country.