On Monday, President of America, Donald Trump sanctioned an executive order to prohibit the purchase of Petro, Venezuela’s new national cryptocurrency by the American citizen or by anyone inside a US province.
The Trump administration has banned the usage of the Venezuelan cryptocurrency. Previously, President Donald Trump said to be preparing to sign an executive order charging extra sanctions on the Venezuelan government for its effort to evade existing economic boundaries.
In another move, Trump administration also accused four current and former senior officials of Venezuela for corruption and misconduct.
US president said in a statement that
“I have authorized the Secretary of the Treasury [Steven Mnuchin], in consultation with the Secretary of State, to take such actions, including promulgating rules and regulations and to employ all powers granted to the President by IEEEPA [International Emergency Economic Powers Act] as may be necessary to implement this order.”
Maduro created the Petro cryptocurrency to salvage from falling off the country’s economy, whereas inflation is expecting to twist to 13,000 percent this year.
The prohibition creates adversities to the government of Maduro’s efforts to enhance its foreign reserves via a digital token.
McClatchy DC reported, President Donald Trump signed an order jamming any US transactions in the Petro, the White House declared.
Particularly, the executive order states:
“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.”
In January, Treasury said that the petro emerged to be an appendage of credit to Venezuela and cautioned that transactions might breach the US sanctions.
Gratefully, the Petro cryptocurrency is dwell by Venezuela’s largest crude oil reserves in the world. However, it has arrived on the market as the socialist nation descends deeper into an economic disaster. Notably, it was by increasing inflation and food shortages.
Last year Maduro announced the creation of digital currency to bypass US sanctions intercepting Venezuela from issuing liability.
Cryptocurrencies and different digital tokens are already widely used in Venezuela. As a hedge against monetary inflation occurring at a very high rate. Thus other easy mechanisms for paying everything in a country.
Experts in crypto regulation state that Trump’s ban is an unsurprising move. Jerry Brito, Director of the Coin Center executive says that
“While Venezuela’s attempt to issue a cryptocurrency is novel. However, there’s nothing new about the US restricting financial dealings with sanctioned countries”.
Further, he added
“Issuing a cryptocurrency is not going to help Venezuela escape sanctions.”