Last month, the Venezuelan government launched Petro, the world’s first state-issued cryptocurrency, in hopes of boosting its struggling economy and circumventing U.S. and European sanctions.
The Trump administration, however, isn’t buying into the country’s new digital currency, which has been called “snake oil” by some financial experts.
Donald Trump is reportedly planning to impose additional sanctions on Venezuela restricting the use of Petro for U.S. financial transactions, according to McClatchy.
The report claims the new, tougher sanctions could go into effect as early as Monday after Trump signs an executive order.
The new sanctions “are likely to be part of a larger package of measures that also include several individual sanctions against Venezuelan officials and/or associates.” The U.S. already has sanctions on “more than 20 current and former Venezuelan government officials in recent months, including [President Nicolás Maduro].”
Even before it launched, Petro was criticized from all sides. Though Maduro claims the cryptocurrency is backed by crude oil, Petro doesn’t actually translate to any concrete assets.
“They’re setting up a stand on the front porch of Venezuela to sell snake oil that’s essentially backed by nothing,” Russ Dallen, a managing partner at the investment bank Caracas Capital Markets, told McClatchy. “People believe its backed by oil, but if you read the contract, it’s really not.”
Trump’s hardened stance on Venezuela’s Petro could send a ripple around the world warning other sanctioned countries (such as Russia) against launching their own state-backed cryptocurrency that could undermine international sanctions.