Trump Bans Venezuelan Cryptocurrency Petro

President Donald Trump issued an executive order banning all transactions in the United States which involve the dubious Venezuelan cryptocurrency, the petro. Specifically, the order pertains to any cryptocurrency issued on or after January 9th of this year, and it applies to both U.S. citizens and any other individuals within the United States, according to a report by CNBC.

The executive order is a response to the Petro, the allegedly oil-backed cryptocurrency the cash-starved Venezuelan government launched in February 2018 to gain capital in the midst of its ongoing economic crisis. (See also: Venezuela to Launch National Cryptocurrency: The Petro.)

According to a statement by the White House, the U.S. government views the launch of the Petro as an attempt by Venezuela to "circumvent U.S. sanctions by issuing a digital currency."

Venezuelan President Nicolas Maduro backed the cryptocurrency at its launch, indicating that each token would be backed by one barrel of petroleum from the state's supply. He claimed that about 100 million Petro tokens would be issued in total, with a net value of roughly $6 billion.

Part of Ongoing Sanctions

The executive order is one part of a much larger effort to restrict Maduro's access to capital. In August of 2017, for example, President Trump issued an executive order imposing financial sanctions against the South American country. At the time, Treasury Secretary Steven Mnuchin said Venezuela "can no longer take advantage of the American financial system to facilitate the wholesale looting of the Venezuelan economy at the expense of the Venezuelan people."

Indeed, Trump has even suggested that a "military option" might be on the table if the economic sanctions do not have the desired effect.

Mnuchin has stated that virtual currencies are a priority for the current administration: "My number one focus on cryptocurrencies, whether that be digital currencies or bitcoin or other things, is that we want to make sure that they're not used for illicit activities," he explained. "So in the U.S., our regulations [state that] if you're a bitcoin wallet, you're subject to the same regulations as a bank." (See also: Venezuela's Petro Isn't Oil-Backed. It's Not Even a Cryptocurrency.)

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