US Bill Against Petro May Spell Trouble for Other Digital Assets
A US Presidential Executive Order is about to be signed into a bill to officially ban US citizens from acquiring or using the Venezuelan Petro coin.
The Venezuelan Petro, a mysterious digital asset that is yet to prove it exists, is about to become a precedent in the world of cryptocurrencies. US President Donald Trump banned the use of the Petro by an executive order, which is now pending to be voted into law. Senate Bill 2015, as the order has been filed, could be approved later in the day.
If this happens, analysts believe there will be a pathway to ban other digital assets. So far, no public blockchain has been censored or banned in the USA, and Bitcoin (BTC) is only banned in a handful of countries.
“The implications for this are huge because it could be bitcoin or some other cryptocurrency inserted into this language,” said Jason Brett, founder and CEO of the Value Technology Foundation.
“We’re talking about a road map for how to ban a particular cryptocurrency.”
The threat arrives at a time when US regulators are increasingly hawkish following the presentation of the Libra digital coin by Facebook. The project has increased the scrutiny of digital coins and tokens. But banning a public blockchain outright has bigger repercussions than a cease-and-desist order against a token-based project.
Banning BTC, in particular, could bring down the entire market, as trading is highly dependent on the free movement of coins. Additionally, the US is at the forefront of adopting digital coins and offering various products based on BTC.
In theory, all digital assets are borderless and could be used to circumvent embargoes. But BTC has a leader advantage, with wider acceptance and higher liquidity. The Petro, on the other hand, is viewed with skepticism.
BTC, however, has been tainted by usage for terrorism financing. The Iranian regime, seen as hostile to the US, is also showing growing BTC usage. Thus, a mechanism to ban BTC in the US may have worldwide repercussions.
BTC traded at $10,348.52 as of 8:45 UTC on Monday, remaining relatively stable above the $10,000 mark.