The Trump administration has banned all use by Americans of a Venezuelan cryptocurrency, saying that its introduction is intended to skirt US sanctions. In a separate move, the administration also slapped sanctions on four current and former senior Venezuelan officials accused of corruption and mismanagement.
In an executive order that took effect immediately, Donald Trump declared illegal all US transactions related to Venezuelan digital currencies, coins or tokens. The prohibition applies to all people and companies subject to US jurisdiction.
In February, cash-strapped Venezuela became the first country to launch its own version of bitcoin, the petro, in a move that Nicolás Maduro celebrated as putting his country at the world’s technological forefront.
In the executive order, Trump said the currency was an “attempt to circumvent US sanctions” imposed for democratic backsliding.
The treasury had said in January that the petro appeared to be an extension of credit to Venezuela and warned that transactions in it might violate US sanctions.
Petro altcoin is backed by crude oil reserves
The petro is backed by Venezuela’s crude oil reserves, the largest in the world, yet it has arrived on the market as the socialist country sinks deeper into an economic crisis marked by soaring inflation and food shortages that put residents in lines for hours to buy common products.
Maduro had announced late last year that he was creating the digital currency to outmaneuver US sanctions preventing Venezuela from issuing new debt.
Bitcoin and other digital tokens are already widely used in Venezuela as a hedge against hyperinflation and an easy-to-use mechanism for paying for everything from doctor visits to honeymoons in a country where obtaining hard currency requires transactions in the illegal black market.
The government has promised that Venezuelans will be able to use the $60 coins to pay taxes and for public services. But with the Venezuelan minimum wage hovering around $3 a month, it is unlikely citizens will buy in large amounts.
In its own statement on Monday, the treasury said it was hitting the four current and former Venezuelan officials with sanctions that freeze any assets they may have in US jurisdictions and bar Americans from doing business with them.