The most exciting thing in crypto this week is Venezuela’s continued attempt to make the Petro an official national currency.
The Petro issued by the Venezuelan dictatorship is a full sanctioned virtual currency that will be launched on November 5.
A high number of experts has questioned the crypto-economics behind the new official state currency Petro. The general opinion is that the economy is already broken to pieces, and few believe that this radical action will be able to do anything for the Venezuelan economic crisis.
Still, I find it interesting that their stance and bullishness on cryptocurrency is quite noteworthy. This is in fact the first nation in the world that fully embraces cryptocurrency and makes it a state currency. With a population of 30 million citizens, the userbase for digital currencies might rise drastically.
Back in March this year, US president Donald Trump signed an executive order banning American citizens of using the currency. This was done in an attempt to prevent the Venezuelan government from evading America’s economic sanctions that were made to cut off funding for Venezuelan president Maduro.
Petro will be the only accepted currency for passports
Venezuela’s Vice President recently announced that Venezuelan passports will only be paid in Petro (new passport and renewing). The Venezuelan passport is already almost impossible to get, now with Petro this is literally impossible for US citizens.
It is a well-known fact that Venezuelan emigration is huge in the USA. Therefore, for those that still do have not citizenship (95% of Venezuelan in the US), it will be challenging to be able to get an ID when the immigration service is collapsed in the US, and now they cannot get passports because we can only get it with Petro while all use of the currency is prohibited.
There is broad support for the sanctions but what solutions do we have against this? The US government has two options:
- Allow the use of Petro, which will make it easier for the country to evade its economic sanctions.
- Deny all citizens access to Venezuela, which will, in turn, lead to people illegally using Petro and they will then possible face juridical consequences.
Unfortunately, none of the options are optimal.