Venezuela Petro cryptocurrency banned in the US
A hard no to the Petro from the USA, possibly for the benefit of any of its citizens that were thinking of getting involved.
New sanctions come down for Venezuela, as an order from US president Donald Trump prohibiting US purchases of the Venezuela Petro cryptocurrency. He authorised Treasury Secretary Steven Mnuchin to issue any necessary regulations to enforce it, Bloomberg reports.
The Petro was specifically touted as a way of escaping US sanctions, and the ban on US purchases might be a glimpse at the future of sanctions, with Iran, Russia and Turkey also reportedly eyeing the potential of cryptocurrencies, possibly as a means of escaping sanctions.
But the Petro has been fraught with complications and doubts since its launch, and it has steadily kept getting more confusing. It's not entirely clear who's bought any, how much has been bought or whether anything's actually happened with the token yet.
On the one hand, Venezuela president Nicolas Maduro has insisted that the Petro has raised $5 billion from a wide range of buyers. On the other hand, the NEM address that's thought to hold the tokens is still showing them all locked away. As far as anyone knows, those who've purchased Petros have yet to receive any.
The order to ban US Petro purchases is now the latest development in the confusing and disorganised saga of the Petro. Maduro previously announced the launch of a Petro Gold cryptocurrency, backed by gold, to back the oil backed Petro but it's not clear whether anything's actually happening there either.
The Petro is an even more contentious issue inside Veneuzela, with the opposition party labelling it an illegal tool for corruption and a way of mortgaging the country's oil supplies for personal gain.
The future of the Petro has been in limbo since before it was created, and a ban on US Petro purchases probably doesn't do much for its credibility.
"It’s a pretty big blow. Since most cryptocurrencies are not actually backed by anything real, cryptocurrency speculation is based on the greater fool theory – I can buy this at $100 because there is someone who is a bigger idiot who is going to buy it at $200. When you take the U.S. out of that equation, you reduce the interest and potential for that speculation," said Russ Dallen, managing director at Caracas Capital.
Not all venture capitalists agree with that sentiment for cryptocurrency as a whole, but it might be a fair assessment of the Petro's potential.
It might not have been worth buying the Petro even when you could do it legally, Dallen suggests. And now the entire oil slick seems to be one step closer to catching fire.
Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VEN, XLM, BTC, XRB
- Tim Draper: Bitcoin ahead of schedule to hit $250,000, may be as early as 2022
- France to pilot national digital currency in Q1 2020, the first in Europe
- Bakkt CEO Kelly Loeffler appointed to US Senate, will depart Bakkt
- Dash cryptocurrency: How Moocowmoo’s alleged exit scam could destroy Dash
- Self-sovereign cryptocurrency private key recovery introduced by Squarelink