As was perfectly predictable, the US has decided to attack Venezuela’s new oil backed crypto-currency the Petro. An executive order by US President Donald Trump bans “all transactions related to, provision of financing for, and other dealings in, by a United States person or within the United States, any digital currency, digital coin, or digital token,” that were created by the Venezuelan government since January 9th. This was released by to a statement.
The executive orders bar its use within the United States. It remains to be seen how the order can be enforced if transactions are not publicly known given the block-chain technology and the bypassing of traditional financial institutions. The real plan is to prevent large businesses from taking it. Minor transactions will be difficult to enforce, but major transactions will be prevented.
The Venezuelan government hopes that the currency will be used to dodge US financial sanctions on the country by using block-chain technology to bypass financial institutions under the influence of the US. Since most global transactions are carried out with USD, the plan is to use this alternative currency to be able to conduct some kind of trade outside the kibosh-ing power of the US government.
In addition, they’re hoping that this crypto-currency will be more valuable for trade than their own national fiat currency which is experiencing a great deal of inflation. This is due largely to two factors: US government sabotage and bad policy in management. While the government was waiting for the oil price to rise back to normal, they issued more currency and borrowed heavily from other countries.
It was announced on February 20th that the issuance of the currency had already raised $735 million in the first day of a pre-sale. Plans continue for another currency backed by precious metals called “petro gold.”
It seems Venezuela, despite its Bolivarian Revolution, is still committed to trying to solve the problems of capitalism within a bourgeois legal framework. It is long overdue that the country fully seize the means of production and begin the construction of a socialist economy.