Trump Says NO to Venezuela's Petro

Trump Says NO to Venezuela's Petro

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Earlier this year, Venezuelan president, Nicolas Maduro, announced the creation a petroleum-backed ICO called the Petro. Last month, Venezuela began preventing its citizens from using the country's nearly free and abundant source of electricity to mine cryptocurrencies, like Bitcoin and Ether. Maduro's plan was to create Venezuela's own cryptocurrency, the Petro, backed by the country's own natural recourses (petroleum, gold and diamonds). He claimed that those mining Bitcoin and Ether were "capitalist parasites", taking advantage of the country's extreme inflation of its Bolivar fiat currency; that inflation rate is about 13,000% this year. Released as an ICO (initial coin offering) of 100 million tokens (with a total intended value of about $6 billion), and Maduro began demanding that Venezuelan companies begin accepting the Petro, immediately. However the Petro was met with controversy, even being referred to as 'illegal' by Venezuelan congress. The U.S. Treasury Department warned early that the Petro is, "another attempt to prop up the Maduro regime, while further looting the resources of the Venezuelan people."

In an executive order issued today, Trump prohibits all U.S. from participating in the Venezuelan government-backed currency: 

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.

The Trump administration believes that Maduro's implementation of the Petro was an attempt at circumventing recent sanctions placed on Venezuela regarding cross-border transactions. The Petro's only avenue of purchase is by way of the U.S. Dollar, or Euro; this means that Venezuelan citizens are unable to participate in the ICO as they are banned from from buying any foreign currency. We'll see more on how the news of this develops upon Trumps attendance at the Summit of the Americas in Lima, Peru next month. 

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