US Senators Plotting Hefty Sanctions on Venezuela’s ‘Petro’ Cryptocurrency

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Photo Credit: Coindesk

Following the unveiling of its Petro coin last year, a group of bipartisan U.S. senators’ are pushing for tighter sanction against Petro, the Venezuelan backed cryptocurrency.

The bill titled, “The Venezuela Humanitarian Relief, Reconstruction and Rule of Law Act of 2018,” actively covers subjects related to Venezuela including the recently proposed humanitarian aid to migrants in a bid to support the restoration of democracy following its continued economic crisis.

According to Legiscan, the bill was first introduced on September 24, and it is believed to be sponsored by the following senators, Bob Mendendez, Marco Rubio, Bill Nelson, John Cornyn, Dick Durbin, David Perdue, Ben Cardin, Ted Cruz, Tim Kaine, Michael Bennet and Patrick Leahy.

It is important to note that the bill draws strength from an executive order signed by U.S President Donald Trump in March which imposed strict sanctions on the Petro, the Venezuelan backed cryptocurrency. But while senators look to be going on with the bill, the bill has also drawn criticism from the cryptocurrency community. Earlier this week, it was reported that Maduro had categorically stated that planned public sale of the state backed cryptocurrency, Petro will commence next month.

Even though the planned public sale of Petro will commence next month, the senate bill has proposed further sanctions which prevents residents within the United states from providing the Venezuelan government with software that will aid the launch of its cryptocurrency.

Speaking regarding the bill, the senators stated that:

“All transactions by a United States person or within the United States that relate to, provide financing for, provide software for, or otherwise deal in any digital currency, digital coin, or digital token, that was issued by, for, or on behalf of the Government of Venezuela are prohibited beginning on the date of the enactment of this Act,”

Call for sanctions report

In another development, the bill included a section calling for a detailed report regarding the impact of cryptocurrencies on United States Sanctions,” To this end, the bill mandates the U.S. State Department together with the Commodity Futures Trading Commission and Securities and Exchange Commission to submit reports to appropriate committee in charge of providing assessment on how digital currencies affect the effectiveness of United States sanctions around the world.”

Although the report would be ready within the next six month, experts believe that should the report be eventually signed into law, it would feature two main aspects. First, it would include details regarding how cryptocurrencies can be used to undermine U.S sanctions. Secondly, there would be recommendation on new legislation and regulatory measures designed to prevent such efforts.