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Venezuela defends currency targeted by U.S. sanctions

Maduro has put more weight behind the petro cryptocurrency, the state-owned oil company in Venezuela said.

By
Daniel J. Graeber
Venezuela's President Nicolas Maduro continues to support a digital currency even after it was targeted by U.S. sanctions. File photo by Cristian Hernández/EPA
Venezuela's President Nicolas Maduro continues to support a digital currency even after it was targeted by U.S. sanctions. File photo by Cristian Hernández/EPA

March 23 (UPI) -- The state-owned oil company in Venezuela said Friday it welcomed a move by the president to support a currency targeted by U.S. sanctions.

The U.S. Treasury Department followed through this week on an executive order signed by President Donald Trump by targeting a digital currency designed to maneuver around existing sanctions on President Nicolas Maduro's Venezuela.

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Undeterred, the state oil company, Petróleos de Venezuela, or PDVSA, said through its official Twitter account that Maduro has continued to support the cryptocurrency.

"President Maduro authorizes PDVSA collection of exports in petro," the company said.

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Washington already imposed sanctions on the Venezuelan government and military officials in December in response to allegations of corruption and repression under the Maduro administration.

U.S. Treasury Secretary Steven Mnuchin said Monday that instead of reforming, "the Maduro regime is attempting to circumvent sanctions through the petro digital currency -- a ploy that Venezuela's democratically-elected National Assembly has denounced and Treasury has cautioned U.S. persons to avoid."

Maduro's government has attempted to control inflation by refusing to loosen foreign-exchange controls and price caps that have increased the short supply of all sorts of products, from food to medicine.

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In January, the International Monetary Fund said that inflation in Venezuela could increase by as much as 13,000 percent this year, 130 times greater than last year. The IMF said the rise is "fueled by monetary financing of large fiscal deficits and the loss of confidence in the nation's currency."

Venezuela's real gross domestic product is projected to fall by about 15 percent for a cumulative GDP decline of almost 50 percent since 2013. The growth forecast for 2019 is for a 15 percent decline.

U.S. action this week prohibited transactions made with the digital currency on behalf of a Venezuelan government facing increased isolation. Four current and former Venezuelan officials were also targeted for corruption.

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Through Twitter, Maduro said a monetary reconversion would take place June 4 with a new fiscal regime.

"A few days ago, we were certified with the fourth largest gold mine in the world," he added. "It's time to take a big step and support our cryptocurrency also in gold."

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