Venezuela’s Petro coin: International investors should plan to stay away
Venezuela made big waves in the Crypto scene when it announced the first state-backed digital currency to hit the market, but now that Petro Coin is available to investors, should you stay away?
Petro Coin has been openly marketed as a way for Venezuela to evade economic sanctions delivered by America. The newly released digital token is a way for the South American country to maintain a level of financial autonomy amidst Venezuelan President Nicolas Maduro government’s massive corruption and human rights abuses. Critics suggest that putting money into the oil-backed coin will support that corruption and abuse.
There is also an issue surrounding transparency, with many suggesting that Petro Coin may be shrouded in lies already. Two contradicting white papers have already been released, with people still unsure of exactly how Petro will be acquired and traded, while Maduro’s claims that the coin raised $5 billion in the first few weeks has no validity – there is no information on the investors that propelled this figure into fruition.
Recently, President Donald Trump issued further sanctioned to counteract the threat posed by Petro. “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 was issued by, for, or on behalf of the Government of Venezuela on or after January 9, 2018, are prohibited as of the effective date of this order,” explained the order, essentially making the coin illegal for anyone on U.S soil. Another strong deterrent for potential investors.
Coin Center executive director Jerry Brito said in a statement via Coindesk that there is “nothing new” about the U.S. issuing sanctions: “While Venezuela’s attempt to issue a cryptocurrency is novel, there’s nothing new about the U.S. restricting financial dealings with sanctioned countries. Issuing a cryptocurrency is not going to help Venezuela escape sanctions.”