USA bans use of Venezuela cryptocurrency, imposes new sanctions on senior officials

Venezuela Colombia exodus

Venezuela Colombia exodus

"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".

President Donald Trump has issued an executive order to ban Venezuela's new national cryptocurrency, the petro.

In addition to the measure against the virtual currency, the US Treasury added four government officials allegedly implicated in corruption, mismanagement or sanctions busting to its blacklist. "While Venezuela's attempt to issue a cryptocurrency is novel, there's nothing new about the U.S. restricting financial dealings with sanctioned countries", says think tank Coin Center executive director Jerry Brito, "Issuing a cryptocurrency is not going to help Venezuela escape sanctions".

A chief strategist of Venezuela's government-backed cryptocurrency is a former US congressional intern who once organized protests against the same socialist administration he's now helping to circumvent USA financial sanctions.

Trump and other critics have claimed the Petro, backed by Venezuela's oil reserves - the largest in the world - is unreliable.

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Trump's order describes the petro's initial coin offering as "recent actions taken by the Maduro regime to attempt to circumvent United States sanctions", and declares all related transactions unlawful. The Venezuelan government has stated that it guarantees that it will receive the Petro as a form of payment for national taxes, fees, contributions and public services. "Issuing a cryptocurrency is not going to help Venezuela escape sanctions".

The Venezuelan government has been under pressure to stabilize the country as record money outflows and falling revenues from oil sales have hampered the economy in recent years.

"This is about providing oxygen to people, not the government", Jimenez said.

Trump's Monday order that prohibits U.S. citizens from using the oil-backed currency will greatly complicate Maduro's plans to raise foreign currency via the cryptocurrency market. But in response to the request for comment, an email signed by "Zeus Team" said that Druzkhov had been invited to Venezuela as an expert and Zeus is not working on the project.

In its own statement on Monday, Treasury said it was hitting the four current and former Venezuelan officials with sanctions that freeze any assets they may have in US jurisdictions and bar Americans from doing business with them. He also argues that the petro — a financial product that doesn't generate interest or have a payback schedule like a bond — doesn't qualify as the sort of debt instrument the Trump administration had been targeting.

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