Donald Trump has signed an executive order banning all US citizens, all US corporations and all US based financial institutions from buying, selling or otherwise trading in Venezuela’s new El Petro cryptocurrency. El Petro is the world’s first cryptocurrency whose value is directly linked to the hard commodity of oil. Venezuela’s launch of El Petro looks to reshape both the cryptocurrency market as well as revolutionising investments in oil by democratising access to the oil markets on an international scale.
Traditionally, investment in the energy industry is typically the terrain of major investment firms or sovereign wealth funds, while individual investors or small conglomerates of investors can rarely get onto the oil ladder in any meaningful way. El Petro looks to change this, by offering a share in Venezuela’s vast oil reserves to individual small and medium sized investors from throughout the world and all at the push of a button.
El Petro is in this sense, not only a mobile investment, but could easily become a form of ordinary exchange that is more pervasive than older cryptocurrencies such as Bitcoin. In a world where oil is ‘good as gold’, having an oil backed currency could end up being a far more stable means of exchange for ordinary items than existing fiat currencies backed by increasingly unstable central banking systems.
Thus, when Venezuelan President Nicolas Maduro said,
“El Petro is the future of Venezuela and the world. This cryptocurrency is linked to the future of economy, production and finances in the region”,
Maduro was in fact speaking from a position not only of confidence, but from a position of a literal revolutionary whose progressive Bolivarian politics could ironically influence the global system of financial capitalism, by democratising the commodities market and bringing it directly to ordinary people, as never before.
While the US is trying to do anything it can to retard the progress of El Petro into wider global markets, it will be difficult for the wider world to say no to an easy to use currency that is backed on a solid and tangible commodity. Venezuela has already opened an international cryptocurrency training centre in Caracas that like all education and vocational training in the country, is free for all students.
While many on the ‘right-wing’ of the finance industry have written off Venezuela’s economic prospects due to its socialist government, in reality, by investing into cryptocurrencies, one is actually seeing a progressive hybrid model of individual entrepreneurialism combined with central investment in a nationalised oil industry, whose proceeds are invested back into public projects and national infrastructure.
Donald Trump’s executive order which purges El Petro from the US was correctly described by Venezuela’s President Maduro as another form of sanctions against the oil rich South American nation. While Maduro has been slammed by Trump for his revolutionary Bolivarian socialist government, when it comes to restricting the economic liberty of one’s people, such a description applies to Trump’s jingoistic prohibition on Americans from buying El Petro coins, far more than it could apply to anything going on in the cryptocurrency markets of Caracas.
Maduro further stated that “new sanctions by the Donald Trump regime” amount to “new imperial aggression orientated to intensify the attack on our people”. Maduro has also stated that Trump’s order violates the Charter of the United Nations and that he plans plans to take the matter up with international bodies.
While the move is a setback for eager US investors in El Petro, the closed American door represents an opportunity for Venezuela to work with new partners, including China on the initiative. In five days time, China is set to formally launch the Petroyuan. Once more countries join Venezuela and begin issuing oil futures contracts in Yuan rather than the US Dollar, El Petro’s ascent as the cryptocurrency gateway to a post-Petrodollar oil market, may well continue a rapid ascent even without access to the US market.
It has been said that the best revenge is success. Ultimately, the success of El Petro in multipolar global markets, will help expose that this new form of anti-entrepreneurial monetary warfare from Washington will not effect the long-term success of El Petro. Venezuela has lost the US market, but if anything this will only open up new international doors to El Petro.