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US Senators Critical of Venezuela’s Oil-Supported Cryptocurrency Plan



United States Senators Marco Rubio and Robert Menendez have condemned Venezuela’s proposed cryptocurrency in a new letter addressed to Treasury Secretary, Steven Mnuchin.

In the open letter, the two senators asked how the Treasury Department was keeping tabs on Venezuela’s plan to make its own oil-backed cryptocurrency, which the country’s president, Nicolas Maduro, has remarked would help the country stay away from global financial sanctions.

The two senators want to know how the department will act to keep the country from using the “petro” to evade American sanctions.

The letter took note that Venezuela has experienced economic troubles for several years, resulting in a dearth of access to basic resources for most citizens.

Rubio and Menendez wrote:

“As Venezuela’s people continue to suffer through a years-long economic crisis that has put food, medicine, and basic services out of reach, and thousands continue to protest the failed and brutal policies of the regime, Maduro has shored up financial support for external actors, ignored the humanitarian and political demands of his citizens, and become more belligerent than ever.

“Maduro has proven that he will use every tool at his disposal to perpetuate his authoritarian objectives, including financial lifelines from Russia and China.

“As such, 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 U.S.-imposed sanctions.”

The two senators went on to specifically ask:

(1) Is the Department monitoring Venezuela’s efforts to develop of a cryptocurrency?

(2) Under current authorities, does the Department have the ability to modify existing sanctions to limit the Venezuelan government’s ability to circumvent sanctions using a new sovereign-backed or an existing cryptocurrency?

(3) What tools can the Department use to intercede in the event that Venezuela attempts to utilize a new sovereign-backed or an existing cryptocurrency to make payments to foreign lenders and bondholders in contravention of U.S.-imposed sanctions?

(4) Does the Department have effective enforcement mechanisms to follow and counter the use of cryptocurrencies?

(5) To what extent is the Department monitoring the development of sovereign-backed cryptocurrencies in other countries, including Russia and North Korea?

(6) To what extent is the Department monitoring possible nefarious uses of other cryptocurrencies by Venezuela, Russia, and North Korea?

The project has been controversial even within its home country, with the nation’s Congress accusing it as illegal and remarking that the legislature needs to vote on the token’s generation.

Earlier this month, a white paper for the coin was shared on social media, but the central government described it as false, saying that Maduro would declare the token’s white paper soon.

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