Foreign-Flag Ships in Venezuela to Use New Cryptocurrency

MOL shipIllustration; Image Courtesy: MOL

Foreign-flag vessels in Venezuela will have to pay for services in Petros, a new cryptocurrency launched by the Government of Venezuela in February 2018.

Venezuela created the digital currency in an effort to battle the financial blockade, raise foreign currency, and generate a new method for the payment of goods and services.

On March 23, the Government issued a bulletin to the Venezuelan shipping agencies, informing them that the National Institute of Aquatic Spaces (INEA), acting as the Venezuelan maritime authority, started collecting the payment for their services rendered to foreign-flag vessels through Petros.

The introduction of the Petro was designed to minimize the impact of the U.S. prohibition on the extension of new debt, resultant from the US Executive Order on August 24, 2017 prescribing additional sanctions against the Government of Venezuela, including the state oil company Petróleos de Venezuela (PDVSA).

It is expected that the Petro will have a value equivalent to the price of the oil barrel, therefore, in its initial stages, its approximate value could be in the order of USD 60 per Petro.

Following the launch of the Petro, and in response to its introduction, US President Donald Trump issued a further Executive Order, 13827, which prohibits US persons, and persons within the US, from providing financing for, or engaging in, any dealings in “any digital currency, digital coin or digital token” issued by the Government of Venezuela on or after January 9, 2018.

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