The president of The United States, Donald Trump, has recently signed an executive order which has a few or more perks attached to it. It can be estimated from the recent report that the trading of the cryptocurrency (Petro) issued by Venezuela is legally prohibited.
First of all, this executive order bans the use of Venezuela’s new oil-backed cryptocurrency which is called Petro. Petro was launched in February by Venezuela’s president Nicolas Maduro which was also termed as the Venezuelan cryptocurrency. It was hoped to be used for utilizing the largest resource it possesses i.e. crude. President Nicola Maduro has ensured that it is accepted for payment. But unfortunately, it is banned by the US president.
This ban was imposed by Donald Trump because it is apparently an attempt to circumvent US sanctions. The White House statement announced this order which also prohibits all US transactions in digital currencies that benefits Venezuela. This means that in the United States, no transaction can be done that involve digital coins issued by the Venezuelan government.
Why was Petro banned?
Back in February, Venezuela became the first country to launch its own oil-backed cryptocurrency with some mineral reserves as well when they saw that cryptocurrency was completely on the hike. The ban on Petro from the USA is believed to send a clear message to their counterparts, Venezuela. On Monday, Treasury Secretary Steven T Mnuchin said that this ban is aimed at restoring the Venezuelan democracy along with the combating of the kleptocracy of the Maduro regime.
Also, he said that this ban is for responding to the humanitarian crisis caused by Maduro’s economic policy. The Venezuelan government was suspected to be holding some drug trafficking aided with cryptocurrency sanctions. It is quite obvious that Petro was announced by the end of 2017 and in this short span of time, the blunder took place. It was like all efforts to boost his nation went in vain after the surprising legal prohibition by Trump.
Venezuelan Government’s response
On the other hand, the take of the Venezuelan Government on this ban is completely different. They referred this ban to “gross meddling”, giving up to “new imperial aggression” against the “financial and economic system”. Not only the Venezuelan government but also the managing director. However, they are not demotivated by this ban. In fact, they are still bent on making Petro, one of the most solid and reliable cryptocurrencies in the world. They will maintain their sovereign decision and continue to promote Blockchain Technology. Thus, one must be aware before investing in any sort of ICO abbreviated as Initial Coin Offerings. The primary objective was to cope up with the misery and temporary financial crisis. The country has a plethora of resource for crude and so its the new currency backed by.
Despite some disputes, it is managed to make $735 in the very first sale, which is pretty awesome for the economy. Notwithstanding the international dispute between the two countries, one cannot make the nation free from the paradigm. The brutal decimation by Trump also proclaimed a plethora of humanitarian crisis. The essential attribute of cryptocurrency is to give authority for the flow of money, which was perfectly lacking with the traditional Bank systems.
Does Petro have the potential?
Despite the fact that the country is in a serious financial crisis, Nicolas Maduro tweeted that the government earned $735m on its launch day, which may be a truth or a lie because the claim has not been independently verified. If the figures are right, then Petro is sure to have a lot of potentials and it can go down in the history books as one of the best cryptocurrencies in the world.
The whitepaper evidences a fairer trading system which contradicts the claim. The major drawback is Petro can only be purchased using US dollars and not any random currencies. So, what if the US govt bans it? Nothing can be worse than that. In fact, it is officially banned and moved away from Venezuela. Anyone found violating these economic sanctions will be subjected to a serious offense. The Venezuelan government has assured to pay the public services tax as well, and that could be possible with the advent of Petro.
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