Trump Blocks U.S. Purchases of Venezuela’s State-Backed Cryptocurrency
U.S. President Donald Trump has issued an executive order prohibiting Americans from purchasing the Petro, Venezuela’s state-backed cryptocurrency. The order is part of a broader initiative to pressure the socialist government of Nicolas Maduro over its handling of Venezuela’s social and economic collapse.
Trump Issues Ban
Executed on Monday, the executive decision bans transactions with the U.S. involving “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.”
The order applies to U.S. citizens, permanent residents and all others residing in the country.
Venezuela launched a national cryptocurrency in February as part of a campaign to boost foreign reserves and restructure a collapsing economy. Venezuela’s economic downturn has spiralled into a full-fledged humanitarian crisis with massive food shortages and hyperinflation. This has prompted an outflow of Venezuelans to neighboring countries.
Maduro’s government claims that the Petro is backed by domestic energy reserves, with its price pegged to one barrel of Venezuelan oil. The president’s office has called the token sale a resounding success with billions raised to date. Last month, the government reported to have sold $735 million worth of Petro tokens on day one of the presale. As of last week, a total of $5 billion had been raised.
U.S. Steps Up Pressure
In January, the U.S. Treasury Department warned investors against participating in the Petro presale amid Washington’s ongoing effort to restrict the Maduro regime’s access to capital. In August, President Trump prohibited U.S. residents from trading new debt issued by the Venezuelan government. He also warned the Maduro regime that a military option was on the table.
Without U.S. capital flowing into Petro, the Venezuelan government loses out on a huge chunk of the speculative market. According to some analysts, interest in the token is likely to be much smaller than it was initially.
U.S. Vice President Mike Pence will deliver a fresh warning to the Maduro administration on Wednesday in a speech to the Organization of American States.
“The Vice President will call on all members to increase pressure on the Maduro regime to restore the country’s democracy and address the humanitarian crisis unfolding in Venezuela,” the Vice President’s spokeswoman, Alyssa Farah, said in a statement.
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