Petro- U.S. Bans Use of Venezuela’S Cryptocurrency (Download PDF)

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US President signed an executive order banning the use of Venezuela’s new crypto-currency, Petro. The executive order that took effect immediately, declared illegal all US transactions related to Venezuelan digital currencies, coins or tokens.

Image of The Explosion In Cryptocurrencies

Image of The Explosion In Cryptocurrencies

Image of The Explosion In Cryptocurrencies

The prohibition applied to all people and companies subject to US jurisdiction. The US government’s actions are believed to send a clear message to their counterparts in Venezuela.

Background on Petro

  • In February, cash-strapped Venezuela became the first country to launch its own version of bitcoin, the petro.

  • The move by President Nicolas Maduro, was aimed to put Venezuela in the world’s technological forefront.

  • The currency was an “attempt to circumvent US sanctions” imposed for democratic backsliding.

  • The petro is backed by Venezuela’s crude oil reserves, the largest in the world.

  • Venezuela is in deep economic crisis marked by soaring inflation and food shortages that put residents in lines for hours to buy common products.

  • Bitcoin and other digital tokens are already widely used in Venezuela as a hedge against hyperinflation with Venezuelan minimum wage hovering around $3 a month

U. S. and Venezuela Relations

  • U. S. and Venezuela relations have traditionally been characterized by an important trade and investment relationship and cooperation in combating the production and transit of illegal drugs.

  • Relations were strong under conservative governments in Venezuela

  • Tensions increased after the socialist President Hugo Chavez assumed elected office in 1999. Tensions between the countries increased after Venezuela accused the administration of George W. Bush of supporting the Venezuelan failed coup attempt in 2002 against Chavez that was partly retracted later.

  • Venezuela broke off diplomatic relations with the U. S. in September 2008 in solidarity with Bolivia after a U. S. ambassador was accused of cooperating with violent anti-government groups in that country, though relations were reestablished under President Barack Obama in June 2009.

  • In February 2014, the Venezuelan government ordered three American diplomats to leave the country on charges of promoting violence.

- Published/Last Modified on: August 3, 2018

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