An executive order has been issued by the U.S. President Donald Trump to ban the US Citizens from buying Petro cryptocurrency. Petro is first state-issued cryptocurrency developed by the government of Venezuela.
Further more, Trump has issued strict orders to the Treasury Secretary, Steven Mnuchin, to implement this ban. Earlier this year, the Treasury Department also announced sanctions on four Venezuelan government officials.
Why was Petro Launched?
The cryptocurrency Petro was launched in February 2018, which could be purchased through US dollars and euros. At the time of its launch, it was claimed to be backed by the oil and mineral reserves of the Venezuelan government. According to some critics, if investors once started buying Petro, it could easily support the official currency of Venezuela, which is steadily falling down mainly due to US-imposed financial sanctions.
Reason for Trump’s Ban on Petro
As mentioned above, the ban was an attempt to put pressure on the Venezuelan President Nicolas Maduro and his undue policies. As a result, the efforts of Maduro’s government to boost their foreign currency reserves have been greatly affected.
US Treasury Secretary, Steven Mnuchin stated that President Maduro destroyed the Venezuelan economy which gave rise to a destructive humanitarian crisis in Venezuela. Instead of improving the present condition of their citizens, the Venezuelan government is trying to bypass the US sanctions through its Petro digital currency. In short, the Venezuelan President is trying to loot the resources of his people.
Effect of Trump’s ban on Petro
According to many critics, it is probably a quiet big blow for the Venezuelan government. Since most of the cryptocurrencies and their present market value is based upon the US dollar, so when we take the role of US out of that scene, the interest and potential rate for any of the cryptocurrency is also automatically reduced.
At a stage when Petro was struggled to create some serious interest among foreign governments, the ban by Trump will be extremely fatal. Earlier this year, Poland had also shown an interest in trading food and medicine with the Venezuelan government for the Petro, which was denied due to the sanctions imposed by the US president.
Let us know your point of view about all this in the comments below!