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Senate bill 1025, which aims to completely ban the use of Venezuela’s cryptocurrency Petro, can have disruptive consequences for the sustainability of cryptocurrencies in the U.S. digital markets.
Last year, Donald Trump signed an executive decree that prohibited U.S. citizens from owning and trading in Petro, the Venezuelan government cryptocurrency backed by the state’s oil reserves. Now, US legislators want to turn this executive order into legislation.
The White House has condemned Petro and portrayed it as a way for its citizens to bypass U.S. sanctions against Venezuela. Venezuela has harshly been condemned in the past for its involvement in crimes against humanity. Several Senators have stepped forward to support President Donald Trump’s bid to ban the Venezuelan cryptocurrency.
Bill 1025 is due to be voted on soon in the Senate and experts predict that the bill could turn into a major law that could become a cause of concerns for the free trade of many other cryptocurrencies besides the Petro.
Petro is a unique state-owned digital currency that is readily available in the markets. It can be used to spend on goods around the world as conveniently as Bitcoin(BTC)trade or any other cryptocurrency. In the face of an impending humanitarian crisis in Venezuela, the US has swiftly adopted resolutions to impose harsher sanctions on the country. But crypto experts are largely cynical of the form of the debate that has led to the dismissal of Petro; they argue that lawmakers are likely to dismiss other cryptocurrencies in the same way.
An ex Booz Allen Hamilton lead associate said that the onslaught of the bill can have huge implications for other cryptocurrencies because it could be Bitcoin or some other cryptocurrency ‘inserted into this language’ and consequently be banned.
A Dangerous Path to Crypto Ban
In six months if and after the bill will be passed, the U.S. secretary of state and secretary of the treasury will present to congressional committees a path or a plan to prohibit the usage of Petro and other cryptocurrencies that are being utilized to circumvent the sanctions against Venezuela.
Despite the growing concerns regarding the bill, so far the US has expressed liberal policies towards free trade of cryptocurrency transactions as long as the payments comply with taxation policies as outlined in the IRS regulations.
But crypto experts highlight the fact that bill essentially bans the use of a particular cryptocurrency throughout the United States. This is ironic because crypto trade trespasses borders and if the U.S. succeeds in undoing this particular digital currency in the country, it could use the same methodology to threaten the free world of other cryptocurrencies as well.