The United States president Donald Trump has banned the purchase and trading of Petro which is owned by the Venezuela government. This is part of a campaign made to pressure the government in which its citizens cannot afford basic needs. President Donald Trump issues the order yesterday stopping U.S citizens from transacting using the oil-backed digital currency. More to that he also authorized Steven Mnuchin who is the Treasury Secretary to issue regulations to ensure that they enforce the order.
Venezuela president Nicolas Maduro created Petro with the aim of saving the country’s failing economy where inflation is already as high as 13,000% this year. This ban by Donald Trump has now complicated Maduro’s efforts to boost foreign reserves through digital currencies. During its ICO the government offered Petro in USD and Euros which limited Venezuela citizens from participating.
According to Russ Dallen who is the managing director at Caracas Capital: “This is a huge blow. Since cryptocurrencies are not backed by anything, cryptocurrency speculation is based on greater fool theory. When you take the US out of the equation, the coin may not go far.”
Mnuchin met with different ministers at the G20 summit to discuss the problems affecting Venezuela. More to just banning Petro US has announced sanctions on four Venezuela officials. The four are powerful ministers in Maduro’s government. According to Mnushin’s statement:
“ Maduro has crippled the Venezuela economy which has led to the humanitarian crisis. Instead of correcting their mistakes they are now trying to circumvent sanctions through the Petro digital currency which has already been denounced by the elected national assembly members in the country.”
After the G20 meeting, Mnuchin said that: “We have discussed how we will achieve our shared objective in restoring democracy in Venezuela Combating the Maduro regime and also responding to the humanitarian crisis which has been caused by Maduro’s economic policy.
Last year in August US administration stopped the trading of new debt which was issued by the Venezuela government and also by a state-owned oil company in all US markets after the deteriorated humanitarian conditions in the country. In fact, US is planning to ban all importations related to the oil sector before the country’s presidential elections in 2020. This is meant to cripple Maduro’s government which depends on crude sales to sustain its economy.
The American Treasury Department had already warned its citizens in January to avoid Petro since it was an attempt to prop up the Maduro regime while they continue to loot resources from the Venezuela citizens. According to Alyssa Farah who is the spokesperson of the Vice president of the United States:
“The US vice president will give a speech asking members to pressure the Maduro regime in order to restore the county’s democracy and address the humanitarian crisis in that country.”
In conclusion President, Donald Trump will also ask other countries to isolate Venezuelan government in a Summit of the Americans which will be held in Lima next month.