News

Venezuelan Petro banned from the USA

US President Donald Trump issued an executive order on March 19th that fully prohibits an American citizen from transactions that involve the Venezuelan cryptocurrency Petro. The order was made effective immediately.

The order states that the decision was taken as it was seen as an attempt by the Maduro government to bypass US Sanctions on the country. The sanctions were imposed on Venezuela to thwart the regime under Nicolas Maduro.  He was said to have the constitution rewritten in his favour in 2017 and had dissolved the powers of democratically elected National Assembly in favour of a newly formed Constitutional Assembly. This sanctions also come at a time when there is a growing humanitarian crisis in Venezuela reeling under the effects of hyperinflation and a shortage of food and basic supplies faced by its people.

The Venezuelan cryptocurrency Petro (PETR) was issued by the regime as a token backed by oil, gold and diamonds from the country and raise funds. It was seen as a method to circumvent the US sanctions which barred banks from dealing with the government as well as its subsidiary oil company PDVSA. This had impacted the country’s reserves and in turn dealt a blow to the Venezuelan economy because 95% of the state’s export revenues had come from the sales of the PDVSA alone. The sanctions had also prevented traditional methods of propping up the economy such as raising more debt or the reconstruction of the existing debt structure.

But doubts emerged about the validity of the cryptocurrency which is backed by an extremely volatile commodity as oil. Also, it was issued by a central bank whose reforms had driven the economy to its present woes. So investors and media worldwide thought the guarantee as a farce. It was also dealt a blow by the National Assembly who in a Parliamentary session ruled the issuance of the Petro as illegal.

The effect of the order would mean another blow to the crippled economy from raising the necessary funds. it increases the pressure on Nicolas Maduro to restore the country’s democracy and solve its country’s economic woes.

 


Discuss this news on our Telegram Community. Subscribe to us on Google news and do follow us on Twitter @Blockmanity

Did you like the news you just read? Please leave a feedback to help us serve you better

Disclaimer: Blockmanity is a news portal and does not provide any financial advice. Blockmanity's role is to inform the cryptocurrency and blockchain community about what's going on in this space. Please do your own due diligence before making any investment. Blockmanity won't be responsible for any loss of funds.

Abhishek Ajit

Abhishek was the co-founder of Blockmanity, he has a background in finance and has a good understanding of Bitcoin and other Cryptocurrencies from an economic standpoint. He is passionate about research and fundamental analysis.

Share
Published by
Abhishek Ajit

Recent Posts

Bullish Signals for Sui Blockchain: Top SUI meme projects of 2024

Macro guru and Real Vision CEO Raoul Pal shone the spotlight on a rising layer-1…

2 months ago

AI Companions: A New Era of Digital Relationships and Virtual Experiences

As the technology landscape transforms at lightning speed, AI Companions has positioned itself as a…

2 months ago

zkCross Network: Simplifying DeFi Complexity and Achieving Fundraising Success

Did you know that 85% of DeFi value is concentrated in six blockchains?  DeFi is…

2 months ago

Don’t Miss Out: Get $CLP Tokens in the Exclusive RWA IDO Now!

CLAPART - a groundbreaking RWA platform has launched its much-anticipated $CLP token IDO on Gempad…

3 months ago

Step into the Future of Web3 at Blockchain Futuristic Conference 2024, August 13-14

Join us at BFC 2024 to explore the future of Web3. Use a special discount…

4 months ago

WebX Asia 2024: Web3 Innovation Ignites in Tokyo

Catch all the updates with Altcoin Observer, official media partner of WebX Asia 2024. Gear…

4 months ago