President Donald Trump imposed additional sanctions on Venezuela on Monday prohibiting the use of any digital currency linked to the failed communist regime.
Trump wrote that the sanctions were necessary “in light of recent actions taken by the Maduro regime to attempt to circumvent U.S. sanctions by issuing a digital currency in a process that Venezuela’s democratically elected National Assembly has denounced as unlawful.”
The sanctions prohibit any American or anyone on American soil from conducting transactions using any digital currency, coin, or token issued on behalf of Venezuela after Jan. 9.
Venezuela launched an oil-backed cryptocurrency, the petro, last month, according to the Los Angeles Times, becoming the first nation to do so. Venezuela’s once thriving economy has collapsed in a startling fashion under years of failed socialist policies. President Nicolas Maduro saw the petro as a way to raise cash to outmaneuver U.S. sanctions.
In August last year, Trump imposed a range of economic sanctions against Venezuela, citing human rights abuses, the establishment of an illegitimate Assembly, public corruption, and the ongoing persecution of the political opposition. In 2015, citing some of the same abuses, then-President Barack Obama declared a national emergency and also imposed sanctions.
Each petro is backed by one barrel of Venezuela’s petroleum, according to CNBC. Maduro said that 100 million tokens would be issued, totaling $6 billion, a windfall for the destitute regime.
Cryptocurrencies, including bitcoin, have come under intensified scrutiny due to their potential for criminal use.
“My No. 1 focus on cryptocurrencies, whether that be digital currencies or bitcoin or other things, is that we want to make sure that they’re not used for illicit activities,” Treasury Secretary Steven Mnuchin told CNBC in January. “So in the U.S., our regulations [state that] if you’re a bitcoin wallet, you’re subject to the same regulations as a bank.”
Venezuela is the latest example of socialism’s failure. The country has the largest proven oil reserves in the world and was once one of the richest and most promising nations in South America. But two consecutive socialist rulers brought the nation to the depths of destitution. The population is starving and children are dying of hunger, while a select ruling elite lives in luxury.
Trump has repeatedly called socialism and communism failed ideologies.
“The problem in Venezuela is not that socialism has been poorly implemented but that socialism has been faithfully implemented,” Trump said in front of the United Nations General Assembly in September last year.
“From the Soviet Union to Cuba, Venezuela—wherever through socialism or communism has been adopted, it has delivered anguish, devastation, and failure,” Trump added. “Those who preach the tenets of these discredited ideologies only contribute to the continued suffering of the people who live under these cruel systems. America stands with every person living under a brutal regime.”