US Senator Calls for Crackdown on Venezuela’s Petro

US Senator Robert Menéndez has called on Washington to step up action against the Petro.

Insisting that Venezuela's new oil-backed cryptocurrency is an extension of credit to the regime of President Nicolás Maduro, US Senator Robert Menéndez has urged Washington to take further action against the Petro.

The Democrat brought up the subject during a Senate hearing held by the Committee on Banking, Housing and Urban Affairs. During that hearing, Commodity Futures Trading Commission chairman J. Christopher Giancarlo said his agency "would watch carefully" for signs that Venezuela may be using the Petro to circumvent sanctions against Maduro’s government.

Menendez’ attack on the Petro came after its launch last Tuesday, with Maduro claiming this to be the first sovereign digital currency in the world. Venezuela is placing high hopes on the Petro to counter US-backed sanctions against Maduro amid deteriorating political and economic conditions in the Latin American country.

Maduro declared during the crypto coin pre-sale:

"The Petro is born and we are going to have a total success for the welfare of Venezuela."

The president said the Petro raised an estimated $735 million on its first day of launch. He hopes the new token will be an alternative to Venezuela's battered national currency, the bolivar, whose value has sunk to 0.00003 versus the US dollar.

In January, Democrat Menendez and his Republican colleague Marco Rubio wrote a letter to US Treasury Secretary Steven Mnuchin expressing their disapproval of the Petro.

The two senators told Mnuchin:

"We are concerned that a cryptocurrency could provide Maduro a mechanism by which to make payments to foreign lenders and bondholders in the United States, actions that would clearly thwart the intent of US imposed sanctions.”

For its part, the Treasury Department has warned all investors and citizens in the US against investing in the Petro for otherwise they will face sanctions themselves.

A spokesman for Menendez stated:

"We continue to look for ways to prevent the Maduro regime from brazenly evading US sanctions and plan to follow up with the Department of Treasury following their issuing of these guidelines.”

Maduro preps gold-backed digital currency

Despite threats of fresh sanctions from the US government and criticism from his own parliament, Maduro seems to be pinning great hopes on cryptocurrencies, not only for the revival of Venezuela’s ailing economy but also the survival of his regime.

Only a day after the Petro pre-sale, the president announced his plan to launch a gold-backed digital currency token.

Speaking to reporters, Maduro said:

"I don’t want to get ahead of things, but we have prepared a surprise, a gold-backed ‘petro,’ which will have the same parameters as the oil-backed ‘petro.’ This topic will be raised next week.”