Published On: Mon, Mar 19th, 2018

Trump prohibits U.S. purchases of Venezuelan cryptocurrency

donald-trumpWASHINGTON - President Donald Trump banned U.S. purchases of a cryptocurrency the Venezuelan government is rolling out, as part of a campaign to pressure the government of President Nicolas Maduro.

Trump issued an order on Monday prohibiting U.S. citizens from engaging in transactions using the oil-backed currency, called the Petro. He authorized Treasury Secretary Steven Mnuchin to issue any necessary regulations to enforce his order.
Maduro created the currency to try to salvage his country’s failing economy, where inflation is estimated to spiral to 13,000 percent this year.
The ban complicates the Maduro government’s efforts to boost its foreign reserves through a digital token. Venezuela’s offering accepted transactions in U.S. dollars and euros, meaning that Venezuelan citizens are forbidden from participating given a ban on buying foreign currency.
“It’s a pretty big blow,” said Russ Dallen, the managing director at Caracas Capital. “Since most cryptocurrencies are not actually backed by anything real, cryptocurrency speculation is based on the greater fool theory -- I can buy this at $100 because there is someone who is a bigger idiot who is going to buy it at $200. When you take the U.S. out of that equation, you reduce the interest and potential for that speculation.”

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