Is Venezuela’s “Petro” Digital Currency a Russian-Backed Move Against the US?

Time has discovered evidence to suggest that the Venezuelan oil-backed digital currency, “El Petro”, was helped into existence by Russian officials, bankers, and businessmen. It’s believed that Russia wants to use the currency as an experiment in dodging US sanctions placed against the Eastern power.

Digital Currency Cannot be Controlled Like Traditional Cash Can

The Russian involvement in the setting up of the Petro has been largely kept a secret until the Time exposé was published yesterday. However, various clues left by the Russian backers have led the publication to report on the connection.

During the ceremony in which the Petro was launched by the Socialist leader of Venezuela, Nicolas Maduro, two of the nation’s advisers on Moscow were sat in the front row. They were thanked for their role in helping the fight against American “imperialism”.

The two advisers have close ties to Russian billionaires, banking interests, and the Kremlin. However, Time report that even more senior Russians were involved in the launch of the currency. According to the article, an executive at one of Russia’s state banks said there were high-level advisers to the Kremlin involved and President Putin himself signed off on the proposal last year. The anonymous whistle blower told the publication of the Eastern power’s motives:

“People close to Putin, they told him this is how to avoid the sanctions… This is how the whole thing started.”

The banker continued to tell the publication that Venezuela were encouraged by Russia to run the digital currency experiment themselves. With an economy already in ruins, the Latin American state had far less to lose than their Eastern ally and are themselves at the mercy of US sanctions against them.

Another factor that Time report as evidence of the Russian involvement in the experiment is that Maduro sent the Venezuelan finance minister, Simon Zerpa, to report to the Russian government about the launch of the Petro on February 21. The minister met with Russian officials in Moscow and posted images of the meeting on Twitter:

En esta reunión hemos pasado revista a la cooperacion económica y financiera entre ambos países, con énfasis en el nuevo criptoactivo de Venezuela: El Petro. Entregamos al Min. Siluánov información actualizada de nuestra criptomoneda.

— Simón Zerpa Delgado (@SimonZerpaD) February 21, 2018

Whilst Time is convinced of the connection between the Russian elite and the Petro digital currency, their Finance Ministry explicitly denied any involvement of the nation’s financial authorities in the scheme. Neither the Kremlin themselves or Venezuelan government provided comment.

The case of the Petro isn’t the first time that a government have been accused of using digital currency to evade US sanctions against them. Previously, we reported of several hacker groups connected to the government of North Korea. Through various security compromises and malware attacks, it’s thought that the rogue state has been amassing cryptocurrency supplies to circumvent the trade embargoes against them. The lack of control any central authority can exert on cryptocurrency makes it ideal for such uses.