Yesterday, President Donald Trump surprised some people by signing an executive order prohibiting transactions within the United States that deal with, “any digital currency, digital coin or digital token” issued by the Venezuelan government after January 9.
Trump explained, “I have authorized the Secretary of the Treasury, in consultation with the Secretary of State, to take such actions, including promulgating rules and regulations and to employ all powers granted to the President by IEEEPA [International Emergency Economic Powers Act] as may be necessary to implement this order.”
This act specifically stated that the term “Government of Venezuela” also encompasses “any political subdivision, agency, or instrumentality thereof, including the Central Bank of Venezuela and Petroleos of Venezuela, S.A. and any person owned by, or acting for or on behalf of, the Government of Venezuela.”
All American citizens, and any individual living in U.S. territory, will be expected to adhere to this order.
This comes after another restriction against the Venezuelan government that Trump signed last August that banned the Maduro administration from doling out new debt and equity, as well as dealing in existing bonds. Trump mentioned that he also isn’t ruling out the possibility of a military option in Caracas, as President Nicolás Maduro is continuously trying to strengthen his grip on the country.
Last year, Maduro announced plans to launch petro, which is a digital currency that would be backed by diamonds, oil and gold reserves, in an effort to circumvent sanctions from the Trump administration. Maduro further explained, “[Petro] will allow us to advance to new ways of international financing and socioeconomic development in the country,” and also shared that the digital currency could “advance in monetary sovereignty, to make financial transactions and to vanquish U.S. economic blockade.”
Despite opposition, in February Maduro shared, “Petro is born and we’re going to have a total success for the welfare of Venezuela.”
Shortly after that announcement, Maduro shared that Venezuela had accumulated $735 million in the first day of a pre-sale of Petro. However, experts believed that the digital token did not bring in any money at all.
Caracas-based computer scientist, Alejandro Machado explained, “The government lacks transparency in how it manages a budget … all they want to do is raise money from people who use solid cryptocurrencies such as Bitcoin [BTC] and Ethereum [ETH] to finance themselves, since [the Maduro administration] can’t issue any bonds due to U.S. restrictions.”
Machado also shared that, “the network for transferring Petros allows anyone to see the full record of transactions, and there have been zero—all Petros are controlled by one address.”
Due to a lack of trust and the political and economic turmoil surrounding the country of Venezuela, it should really be of no great surprise that Trump signed this executive order.