Russian officials and businessmen were reportedly instrumental in helping Venezuela create its oil-backed petro cryptocurrency. If true, the interference was likely intended to erode US sanctions that have afflicted Russia since 2014.
TIME [1] has reportedly "found Moscow's fingerprints all over the creation of the petro." The investigation sheds light on a theory that Russia assisted and perhaps even initiated the launch of Venezuela's petro[2]. It's endgame would have been to undermine the effectiveness and credibility of US sanctions.
The theory aligns itself with the general narrative that Russian elites, seeking relief from US sanctions imposed by President Obama after Russia annexed Ukraine's Crimean Peninsula in 2014, could be trying to "poke holes" in the effectiveness of US sanctions broadly.
According to a Russian state bank official with cryptocurrency experience, senior advisers to the Kremlin received President Vladimir Putin[3]'s approval sometime in 2017. TIME reports that the anonymous source stated, "People close to Putin, they told him this is how to avoid sanctions."
The Finance Ministry in Moscow apparently said that "none of Russia's financial authorities were involved in the petro's creation."
ETHNews sought commentary from the White House but did not receive an immediate reply.
On February 20, 2018, Venezuela's president, Nicolas Maduro[4], launched the petro during a ceremony from the presidential palace in Caracas, where he referred to the petro as "kryptonite" in the fight against "Superman," referring to the US government. Maduro's Russian advisers, Denis Druzhkov and Fyodor Bogorodsky, both had front row seats for the speech. Afterward, Bogorodsky gave a brief statement in Russian, congratulating Maduro the "beloved leader" for making a "very risky but timely move."
If true, this secretive action by Russia could have far-reaching implications well beyond the scope of cryptocurrency legislation.
Venezuela might have been more than willing to accept Russian help, as both nations have been on the negative end of US sanctions recently. If Russia was hesitant to potentially devalue its own fiat currency by issuing a digital counterpart, the cryptoruble,[5] it may have jumped at the opportunity to escape US sanctions by supporting a proxy nation's similar issuance.
Moreover, the dramatic decline in value of Venezuela's national fiat, the bolívar[6], could have made the country's officials eager to receive Russia's assistance.
On March 19, President Trump signed an executive order[7] forbidding American citizens from investing in the petro.
Jordan Daniell is a full-time staff writer for ETHNews with a passionate interest in techno-social developments and cultural evolution. Jordan enjoys the outdoors, especially astronomy, and likes to play the bag pipes and explore southern California on foot in his spare time. Jordan lives in Los Angeles and holds value in Ether.
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