Launched in February 2018, Petro is a cryptocurrency developed by the government of Venezuela. It is backed by Venezuela’s oil and mineral reserves and should hopefully help to solve the falling currency of Venezuela, the bolívar fuerte and also bypass US Sanctions in order to develop international business and international financing.
According to Cointelegraph, an executive order by President of the United States Donald Trump has banned Petro. Its main aim is to boost foreign reserves by using US Dollars and Euros to purchase Petro, but with the ban imminent, reaching that aim will be problematic to say the least.
Cointelegraph further adds that as there is a ban on buying foreign currency, Venezuelans cannot legally participate in buying Petro.
Futurism, has shown statistics about Venezuela’s falling economy. There is a 30% unemployment rate and an average Venezuelan cannot afford food or medical care, which means that the country is falling drastically. The only hope to save the deprived nation was Petro, the launch of which was announced happily by President Nicolás Maduro.
CNN Money further added fuel to the fire. The Petro is seen to be downplayed with major criticism from mainstream investors and cryptocurrency experts pointing out the conflict of digital currencies not being controlled by a government, which is not the case in Petro.
Coindesk quoted Jerry Brito, Coin Center executive director, “While Venezuela’s attempt to issue a cryptocurrency is novel, there’s nothing new about the U.S. restricting financial dealings with sanctioned countries. Issuing a cryptocurrency is not going to help Venezuela escape sanctions.”
The executive order is as follows:
“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.”
CCN reports the practical scenario, basing that international disputes between US and Venezuela are still to be defined and banning such activities will not be fully possible and will only increase the value of the cryptocurrency. In cryptocurrencies, risk breeds rewards!
Coindesk mentioned how Maduro tweeted that Trump was scared of Petro and this was a sign that Venezuela was in the right direction.
There was even news from Coindesk about the Russians being part of the Petro. The article emphasizes that the Russian government officials and businessmen had helped the Venezuelan government in launching the Petro. Whether this is true or false, it is yet to be confirmed.