President Trump has officially signed an executive order forcing sanctions against Venezuela. The country holds a “petro” cryptocurrency that is even controversial within its own countries’ government. Earlier this month, Rafael Guzman, chairman of the Economic and Finance Commision, said in a statement.
“This deepens the crisis that we are living in. The PTR is another [example] of corruption, and we will come out of this crisis with measures that we have announced from this Parliament.”
Venezuela and its citizens within the cryptocurrency space remain strongly divided on the subject. Venezuela sits on the world’s largest oil reserves but the country in the middle of a deepening economic catastrophe and rising inflation. The petro coin is Nicolas Maduro’s, Venezuela’s president, desperate attempt to pull his country from its economic and humanitarian crisis.
Russ Dallen, a managing partner of Caracas Capital Market, gave his opinion on the “petro” coin and its backing by saying, “They’re setting up a stand on the front porch of Venezuela to sell snake oil that’s essentially backed by nothing. People believe its backed by oil, but if you read the contract, it’s really not.”
However, many are wondering why the U.S needs to get involved in the first place. Let’s explore this a bit further.
President Trump And U.S Sanctions
The United States has issued sanctions against nearly 20 Venezuelan government officials lately, and it has prohibited the major U.S banks from purchasing new Venezuelan debt. U.S lawmakers hold concerns that cryptocurrencies provide foreign governments another way to make payments to foreign bondholders and lenders in the U.S and oppose the intent of the sanctions. Basically, President Trump has just banned any acceptance of the new cryptocurrency within the U.S.
Senators from both political parties in the U.S. have raised concerns about this. Ben Nelson, the U.S Democratic Senator from Florida, spoke up this week saying that Maduro was using a “rouge” digital token to evade U.S. sanctions. Robert Menendez, a Democratic Senator from New Jersey, and Marco Rubio, Republic Senator from Florida, were the first to raise concerns of this when the petro coin was introduced, except their fears were that other U.S adversaries would follow suit.
The Petro ICO is set to close today and details and amounts raised by the country’s ICO should come to light shortly.
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