US Treasury Warns Against New Venezuelan Petrocoin

Petrocoin

REALLY? Like having to be warned about investing in Venezuela in any way shape or form? Seems Venezuela in considering offering a “petro-coin”, or more precisely, a cryptocurrency backed by the county’s oil reserves. YEAH! So, what could possibly go wrong? Well, for one its may be illegal based on the Venezuela constitution (but hey, laws are meant to be re-written, right?). Another? Seems they have had trouble pumping oil down there and even if they do, I bet you the cryptocoins will be last in line to see it. Oh yeah, one more thing. The whole ‘shebang’ in Venezuela may be coming down in civil war. But, on the plus side, you can get the “petro-coins” at a super discount (try $.01 for starters). Now, asset-backed cryptos ARE the wave of the future, just not Venezuela’s.
(Bill Taylor/CEO)


“Venezuelan President Nicolas Maduro this month said his government will soon issue 100 million petros, backed by an equivalent number of barrels of oil, partly to get around the U.S. sanctions.

Those sanctions prohibit the purchase of newly issued Venezuelan debt, which has left Maduro unable to refinance the country’s crippling debt burden and led Socialist Party officials to seek new forms of raising hard currency.

Maduro is seeking to capitalize on the success of cryptocurrencies like bitcoin by creating one for Venezuela as its traditional currency, the bolivar, plunges to all-time lows against the dollar and the country struggles with hyperinflation.

“The petro digital currency would appear to be an extension of credit to the Venezuelan government … (and) could therefore expose U.S. persons to legal risk,” a Treasury spokesman told Reuters on Tuesday.

“(It) is another attempt to prop up the Maduro regime, while further looting the resources of the Venezuelan people.”

Venezuela’s Information Ministry did not immediately respond to a request for comment. The OPEC nation, struggling with widespread shortages of food and medicine, is seeking to raise hard currency amid the crippling crisis.

U.S. banks have grown more cautious about operations involving Venezuela since Washington imposed sanctions, exposing them to legal and reputational risks, finance industry sources said…”


Full Story at Reuters.com