Venezuelan Petro Against US Sanctions: History and Use of the Crypto

Venezuelan trade volume dominates P2P marketsVenezuelan peer-to-peer markets have long been a leader in terms of volume, in part owing to widespread geo-blocking that targets Venezuelan citizens on the part of cryptocurrency exchanges.

At the start of 2019, Alfred de Zayas, the first U.N. rapporteur to visit Venezuela for 21 years, described U.S.-imposed sanctions as comprising "Economic warfare." The special rapporteur recommended that the International Criminal Court investigate the sanctions maintained by the U.S. as potential crimes against humanity under Article 7 of the Rome Statute, arguing that the sanctions are illegal due to their lack of endorsement from the U.N. Security Council.

President Donald Trump has recently threatened to intensify the sanctions currently imposed on Venezuela, stating that he will "Continue to use the full weight of United States economic and diplomatic power to press for the restoration of Venezuelan democracy" while announcing support for the recognition of Guaido as the country's legitimate leader in January.

At the start of January 2018, President Maduro ordered the issuance of the first 100 million Petros, announcing that each Petro will be pegged to the value of one barrel of Venezuelan oil - equating the cryptocurrency's capitalization to roughly $5.9 billion.

"President Maduro decimated the Venezuelan economy and spurred a humanitarian crisis. Instead of correcting course to avoid further catastrophe, the Maduro regime is attempting to circumvent sanctions through the Petro digital currency - a ploy that Venezuela's democratically-elected National Assembly has denounced and Treasury has cautioned U.S. persons to avoid."

The U.S. Treasury Department described Petro as comprising an "Attempt to prop up the Maduro regime, while further looting the resources of the Venezuelan people." On March 27, Bitfinex announced that it would not support Petro in light of the U.S. sanctions against the cryptocurrency.

The same month saw the National Assembly pass amendments to Anti-Money Laundering laws to pave the way for Venezuelan cryptocurrency exchanges to conduct foreign exchange operations using Petro.

During December 2018, the Venezuelan government moved to automatically convert its pensioners' monthly bonuses into Petro.

With regard to "Transactions in Venezuelan digital currency," the complaint alleged that U.S. sanctions violated the WTO's General Agreement on Trade in Services by subjecting Venezuelan financial service suppliers to conditions "Less favourable than that accorded to like services and service suppliers of WTO Member States not subject to the measures," as well as conditions inferior to the treatment of "Like domestic financial services and service suppliers."

In May 2019, Venezuelan U.N. delegate Geneva Jorge Valero stated that Russia and Venezuela were discussing utilities for Petro amid agreements to settle trade using the Russian ruble.