The Petro, short for petromoneda, is a new attempt from the Venezuelan government to boost the country's struggling economy using cryptocurrency, and U.S. President Donald Trump just signed an executive order to ban its use in the United States.
The cryptocurrency was launched in February 2018 but was announced back in December. Its controversy sparks from the fact that Petro is backed by Venezuelan oil and mineral reserves and is intended as a supplement to Venezuela's money, the bolívar fuerte, in order to avoid U.S. sanctions while doing international financing.
"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."
This executive order was put in place after Venezuelan President Nicolás Maduro claimed that Petro sales (which were also open to non-Venezuelan investors) raised more than $700 million USD after a pre-sale in February. The Venezuelan government is ready to accept Petro coins as payment for services and will encourage its use to merchants from all over the country.
The United States has previously been considering sanctions against Venezuela in protest to the country's upcoming elections in March, in which Venezuelan president Maduro will seek reelection. Maduro has often been described as a dictator by many western media.
"While Venezuela's attempt to issue a cryptocurrency is novel, there's nothing new about the US restricting financial dealings with sanctioned countries. Issuing a cryptocurrency is not going to help Venezuela escape sanctions," Coin Center executive director Jerry Brito said in a statement.