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Author Topic: Trump Issues Executive Order Banning Venezuelan Crypto Currency  (Read 21 times)
Hydrogen
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March 19, 2018, 07:23:22 PM
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President Donald Trump banned U.S. purchases of a cryptocurrency the Venezuelan government is rolling out, as part of a campaign to pressure the government of President Nicolas Maduro.

Trump issued an order on Monday prohibiting U.S. citizens from engaging in transactions using the oil-backed currency, called the Petro. He authorized Treasury Secretary Steven Mnuchin to issue any necessary regulations to enforce his order.

Maduro created the currency to try to salvage his country’s failing economy, where inflation is estimated to spiral to 13,000 percent this year.

The ban complicates the Maduro government’s efforts to boost its foreign reserves through a digital token. Venezuela’s offering accepted transactions in U.S. dollars and euros, meaning that Venezuelan citizens are forbidden from participating given a ban on buying foreign currency.

“It’s a pretty big blow,” said Russ Dallen, the managing director at Caracas Capital. “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.”

New Sanctions
Mnuchin met with other finance ministers on Monday at the G20 conference in Buenos Aires to discuss the situation in Venezuela. His department also announced sanctions on four more current and former Venezuela government officials, according to a statement posted on Treasury’s website.

The sanctioned officials are Willian Antonio Contreras, the vice minister of internal commerce; Nelson Reinaldo Lepaje Salazar, who is acting as head of the office of the national treasury, according to the U.S.; Americo Alex Mata Garcia, an alternate director on the board of the National Bank of Housing and Habitat; and Carlos Alberto Rotondaro Cova, the former president of the board of directors of the Venezuela Institute of Social Security.

“President Maduro decimated the Venezuelan economy and spurred a humanitarian crisis. Instead of correcting course to avoid further catastrophe, the Maduro regime is attempting to circumvent sanctions through the Petro digital currency – a ploy that Venezuela’s democratically-elected National Assembly has denounced and Treasury has cautioned U.S. persons to avoid,” Mnuchin said in a statement.

In his meeting with his international counterparts, Mnuchin said, “we discussed how to achieve our shared objectives of restoring Venezuelan democracy, combating the kleptocracy of the Maduro regime, and responding to the humanitarian crisis caused by Maduro’s economic policy.”

For more on cryptocurrencies, check out the Decrypted podcast:

A press official for Venezuela’s Information Ministry declined to comment

Pence Speech

In August, the Trump administration barred the trading of new debt issued by Venezuela’s government and state-owned oil company in U.S. markets amid deteriorating humanitarian conditions in the oil-rich nation. The U.S. government has been weighing sanctions on Venezuela’s all-important oil sector before the nation’s presidential election on May 20. That would be a potentially crippling blow to the Maduro government, which depends almost exclusively on crude sales to sustain what’s left of the economy.

The Treasury Department warned investors in January to steer clear of the digital currency, calling it “another attempt to prop up the Maduro regime, while further looting the resources of the Venezuelan people.”

Vice President Mike Pence will pressure Maduro’s government in a speech Wednesday to a session of the Organization of American States, his office said.

“The Vice President will call on all members to increase pressure on the Maduro regime to restore the country’s democracy and address the humanitarian crisis unfolding in Venezuela,” Pence’s spokeswoman, Alyssa Farah, said Monday in a statement.

Trump plans to attend the Summit of the Americas in Lima next month, where his administration is likely to highlight its efforts to isolate the Venezuelan government.

https://www.bloomberg.com/news/articles/2018-03-19/trump-prohibits-u-s-purchases-of-venezuelan-cryptocurrency

....

I had not realized Venezuela's inflation is projected to reach 13,000% this year.  Sad

That sounds horrendous. I can't imagine what market and living conditions must be like there. How can Venezuela survive the year with conditions being that terrible?

If I'm remembering right, venezuela's crypto was noteworthy in that it was reported to be backed by venezuela's oil reserves. It was backed by a commodity with intrinsic value which is one point the authors of this article appear to have missed in their enthusiasm to brand all crypto as being "printed out of thin air without limit".  Smiley


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March 19, 2018, 08:39:08 PM
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I had not realized Venezuela's inflation is projected to reach 13,000% this year.  Sad

That sounds horrendous. I can't imagine what market and living conditions must be like there. How can Venezuela survive the year with conditions being that terrible?

If I'm remembering right, venezuela's crypto was noteworthy in that it was reported to be backed by venezuela's oil reserves. It was backed by a commodity with intrinsic value which is one point the authors of this article appear to have missed in their enthusiasm to brand all crypto as being "printed out of thin air without limit".  Smiley


Hello Hydrogen. You are always bringing up good topics.

Regarding Venezuela and Maduro, people are facing a big problem there. I am Brazilian and I have some friends in Venezuela. They are in really bad conditions.

Maduro is already considered a dictator by many countries in South America. Venezuela was even suspended from South America free market block (MERCOSUR) based on democracy concerns.

Maduro irresponsibility with Venezuela's currency (bolivar) caused this 13.000% inflation. They are suffering above 80% inflation for the last 4  years at least.

This caused food shortage, basic hygiene products shortage, among other problems...
Venezuelan refugee crisis could eclipse Syria's, economist predicts

Venezuela should be a paradise. Small country, population of only 30 million people, they have the Amazon Forest and the Caribbean Sea, world largest oil reserves. And people are starving on this "popular regime".

Anyway, nobody who believe in crypto should fund a centralized dictatorship.
Who will believe that this cryptocurrency will be backed by his oil reserves? He is a dictator, he has no respect for laws or for the people.

What concerns me about this article, is Trump position.
Maduro and Chaves always said that the problem of their economy was that United States are boycotting them.
Few months ago Trump said that he was thinking about a military option in Venezuela.  Everyone knows he is not going to do this,  but this remarks strengthen Maduro's speech...

That's like his "proof" that all that goes wrong in his country, people can blame the US and only Maduro will defend them.
Venezuelans join 'anti-imperialist march' against Trump

He is probably going to do the same again now...

So sad.

The only thing that is working there is cryptomining. As electricity is almost free there (because government subsidizes it) people are mining crypto like crazy there, and making huges amounts of money, because bolivar is worth nothing, so every few dollars are much valuable.
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