Published On: Thu, Apr 19th, 2018

Venezuela requiring foreign ships to pay for services in crypto currency

Venezuela-PDVSACARACAS - Foreign ships in Venezuela will have to use the recently created cryptocurrency, Petro, to pay for services while in the South American country. And that could put the shipping firms on collision course with the US and its sanctions.

Venezuela has vast offshore oil and gas resources. Its embattled government introduced the Petro as a digital currency intended to circumvent a US-led financial blockade, to raise foreign currency and to generate a new method of paying for goods and services.

National Institute of Aquatic Spaces (INEA), the country’s de facto maritime authority, says it will take payments only in the Petro for services such as pilotage or towage rendered to foreign-flag ships.

The Petro was designed as a means for Venezuela to minimize the impact from an August 2017 executive order by US President Donald Trump which imposed sanctions on Caracas and prohibited the extension of new debt to the oil-rich but inflation-plagued economy.

America has been using limited sanctions to turn the screw on the leftist regime of President Nicolas Maduro, which it accuses of trying to subvert democracy there. But so far Washington has stayed away from wholesale restrictions on the oil industry, source of major revenues for Venezuela, holder of the world’s biggest oil reserves.

But after the introduction of the Petro in February, the US issued an executive order in March barring anyone in America from dealing in any digital currency issued by Venezuela.

It also authorized fresh sanctions on Venezuela’s state oil firm PDVSA.

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