The US President Donald Trump has issued an executive order prohibiting its citizens or anyone living in the US from dealing with digital coins or cryptocurrencies issued by, for, or on behalf of the Government of Venezuela on or after January 9, 2018. It is obvious that the ban is aimed at the Petro.
Trump passed the executive order under the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.), and section 301 of title 3, United States Code.
The section 1. (a) of the executive order says
“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 order came into effect at 12:15 p.m. eastern daylight time on March 19, 2018.
Venezuela, which is under the US sanctions, issued a controversial cryptocurrency named “Petro” in February. While the government under Nicolas Maduro claims it as a digital asset backed by oil, skeptics are of the opinion that it is neither oil backed nor a perfect decentralized currency. Venezuela’s opposition has categorically stated that the cryptocurrency is illegal. Maduro launched the cryptocurrency in an attempt to circumvent the US sanctions.
The country’s inflation is estimated to spiral to 13,000% later this year. The Venezuelan government has claimed that it has already raised $5 billion out of the targeted $6 billion funding from its ICO. The government is planning to issue up to 100 million Petro tokens. Maduro, at the time of launch, stated that each cryptotoken will be backed by 1 barrel of oil.
Commenting on the executive order, Russ Dallen, managing director at Caracas Capital, opined that the order is a “big blow” for Venezuela.