Both Venezuela and Russia have something in common: they are not very friendly with the United States. Both states have received sanctions from the most powerful countries in the world, which ends up to make them ally with each other. Now, the two countries are considering to trade using the ruble and the petro as settlement, according to RT, the Russian governmental TV.
The trades will use the two currencies, the fiat from Russia and the official crypto from Venezuela. A representative from Venezuela in the United Nations affirmed that one of the goals of the deal with Russia was to eliminate the use of the United States dollar (USD) in the country.
It is because of the strength that the USD has that the fiat currency of the United States is so valuable. The country can use it to impose sanctions on countries and, this way, maintain its geopolitical power.
This was, in fact, the reason why recently a politician from the United States decided to start a law to ban cryptos, as they would be against the national sovereignty because they would weaken the dollar’s hegemony.
Venezuela is facing a severe crisis in the economy and the sanctions imposed by the United States are obviously another problem that the country has to face while it tries to keep its economy afloat (and fails). Russia, despite being the considerably more consolidated economy, is also suffering from U. S.-based sanctions.
The hope of Venezuela is that the country could be able to have some help from Venezuela in order to restructure the foreign debt of the country, which is skyrocketing right now. In order to be able to do it, the government is focused on finding deals with more friendly countries.
The Problem of The Petro
While Russia trading with Venezuela is not really that interesting for us, the fact that they seem to be willing to use the Petro is. The national cryptocurrency was launched last year and it was largely considered a failure. The almost respectable exchange accepts it and the government of the United States has banned all citizens from acquiring the tokens.
Some people even speculated at the time of the launch that the Petro was not properly backed with Venezuelan oil like the government affirmed, but no one was ever able to prove anything in the end.
Now, we have to wait and see what will come out of these transactions. Will the Petro really be able to survive or will it continue its way towards oblivion?