President Donald Trump has issued an executive order to ban Venezuela’s new national cryptocurrency, the petro. It’s the first cryptocurrency-related executive order a president has issued and another blow to an already dubious virtual token that’s supposedly backed by oil reserves, as Venezuela’s president Nicolás Maduro has said.
Trump’s order describes the petro’s initial coin offering as “recent actions taken by the Maduro regime to attempt to circumvent US sanctions,” and declares all related transactions unlawful. His order also makes reference to Venezuela’s National Assembly being in opposition to the launch of the petro. One legislator from the assembly called it “illegal and unconstitutional” on Twitter.
In February, Venezuela launched the petro, allegedly raising $735 million, according to Maduro’s tweet. Many experts have expressed doubt over the digital currency, which Maduro has proposed as a means for Venezuela to “overcome the financial blockade,” likely in reference to sanctions imposed by the US and the EU. Venezuela’s actual national currency, the bolivar, suffers from quadruple-figure inflation, and one bolivar is currently worth 0.00003 USD.
The executive order to ban the petro isn’t that surprising, considering the US’s current sanctions on Venezuela. The US Treasury warned domestic investors back in February not to touch petro in case it violated sanctions, saying “the petro digital currency would appear to be an extension of credit to the Venezuelan government” and “could therefore expose US persons to legal risk.”
Experts in cryptocurrency regulation say that Trump’s ban is a predictable move. “While Venezuela’s attempt to issue a cryptocurrency is novel, there’s nothing new about the US restricting financial dealings with sanctioned countries,” says think tank Coin Center executive director Jerry Brito, “Issuing a cryptocurrency is not going to help Venezuela escape sanctions.”