Business 21 March 2018

Dennis Wafula

Venezuela got help from Russia in launching petro: report

The government of Venezuela got help from the Russian government officials and businessmen in launching the petro token, Time reported on Tuesday.

According to the report, Russian billionaires Dennis Druzhkov and Fyodor Bogorodsky advised Venezuelan President Nicolas Maduro in his efforts to create petro, the first state-backed cryptocurrency in the market created with hopes of strengthening Venezuela’s financial market.

The two, however, were not the top Russian authority to back Maduro. According to the report, senior advisers’ to Kremlin also had a hand in the creation of petro, and that Russian President Vladimir Putin “signed off” on Venezuela’s cryptocurrency effort in 2017.

Russian officials denied the report. In a statement to Time, the Finance Ministry denied involvement of any government officials in the creation of petro.

Russian involvement with Venezuela’s state-backed cryptocurrency could be seen as efforts to “break off from the western influence.” Ever since the U.S. and its allies put sanctions on Russian after it invaded Ukraine, various efforts have been done to have the sanctions lifted. It seems lifting the sanctions will not be enough. According to a policy paper on global trade that was published in September, Russia seeks to “overcome the excessive dominance” of the Western currencies especially the U.S. dollar. Putin was reportedly advised by people close to him that supporting the creation of petro would be a step in avoiding such sanctions by the United States.

On Monday, the U.S president Donald Trump officially sanctioned the Venezuelan cryptocurrency.  This action barred all Americans residents from buying the petro.

In an official statement, Maduro condemned the sanctions by Trump and stated that they were in violation of the United Nation Charter and international law. He termed the act as attacks against his people, claiming that the president of the United State was scared of the power petro would give to nations.

U.S officials are in support of the sanction with emphasis that the international communities should put pressure on Maduro regime. Other state officials like Florida representative Ileana Ros-Lehtinen advocated for humanitarian support for the people in the country.

Despite the sanction, the sale of the initial coin offering is still in progress with Maduro expecting the crowdsale to net $6 million.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

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