Venezuela, the federal state in the north part of South America is in the process of closing some mutual settlements with Russia while using the ruble against the US dollar. The conclusions for the depressed economy by connecting with the world’s largest economy in the bilateral trade would certainly be a big step for the restructuring of Venezuela foreign debt. The Russian government-sponsored TV channel RT on May 17, published the updates.
Jorge Valero, Venezuela’s representative in Geneva-based United Nations office revealed that both Caracas (Venezuela’s capital) and Moscow (Russia’s capital) are also mulling over the use of Venezuela state-sponsored oil-backed official cryptocurrency El Petro (PTR) that is launched in February 2018 and till now a controversial project for the US.
The two nations are in full motion to eliminate the use of the United States dollar in common trade deals amongst each other and to fight back against the US sanctions while trading with Russian ruble and Venezuela state-owned- the world’s first national, oil-backed Petro digital currency.
Reportedly, Venezuelan authorities are now working with Russia to find progressive opportunities towards the strong relations and to eliminate the use of the United States dollar completely from their list.
It is important to note the reason behind the invention of Petro which is a government initiative to save the economy from a meltdown. The inflation in Venezuela totaled around 4,115 percent and the Bolivar lost up to 96 percent of its value, in the last 12 months, that drove the country’s economy to escalate in a downward direction and caused hyperinflation.
The terrible drop in the value of the Bolivar made the country’s government search for alternative ways to save the economy from the destruction and breakdown. However, the US government had made the restrictions over the use and acceptance of Petro, and in the process, the US government also halted the sale of Venezuela oil to the United States. The Trump administration literally limited Venezuela’s ability to accomplish any international financial transactions in order to further squeeze the finances of the government led by President Nicolás Maduro. Last year, following the launch of the coin, during March 2019, the U.S. President Donald Trump banned American citizens from purchasing Petro,
Venezuela Petro- The Controversial Project
Due to the absence of global exposure, the experts are opposing and criticizing the Venezuelan Petro that is developed to eradicate poverty and overcome from the price rise. People still have doubts about the authenticity of Petro and doubting on the major factors in regards to its backing of Venezuelan Oil.
However, the consultant to the President of Russia in April recommended embracing a digital currency in Crimea to attract investors and avoid sanctions.