Resource-based token as an excuse for a new geopolitical struggle round
RegulationBit News Today2 min read
Iran and Russia are reportedly developing state-backed cryptocurrencies, mirroring a scheme Venezuela quietly implemented in 2018 with Russia's help. According to TIME's reporting, the state-backed petro of Venezuela is not an independent effort, but a joint Russian-Venezuelan project with the backing of Presidents Nicolás Maduro and Vladimir Putin. According to sources familiar with the effort who spoke to TIME, the initiative was aimed at diminishing the impact of American sanctions.
Putin-backed cryptocurrency experiments linked to Iran and Venezuelan petro cryptocurrency
Earlier in the year, Venezuela launched the petro, creating what was planned as the world's first state-backed cryptocurrency. Backed by domestic oil reserves, the digital currency was designed to circumvent sanctions from the U.S. and EU and help support the struggling regime. But unbeknownst to most, the Maduro regime received help from Moscow on the petro rollout. In a policy paper analyzing global trade, President Vladimir Putin, the Russian head of state, called for efforts to "overcome the excessive dominance" of Western currencies. The United States had already levied economic sanctions against Venezuela in August.
Russia, which has battled U.S. economic sanctions, is also plotting a cryptocurrency launch, with advisers exploring a state-backed digital currency. Advisers to the Russian president have described these cryptocurrency initiatives as part of a struggle against American hegemony in international affairs. According to an executive at a Russian state bank, creating a digital ruble carried risks for the domestic economy. An executive at a Russian state bank told TIME on condition of anonymity that associates of Putin advised him that cryptocurrencies offered a method to evade sanctions.
A Russian state bank executive dealing in cryptocurrencies revealed that senior Kremlin advisers oversaw the project in Venezuela after Putin approved it the previous year. This would offer Moscow an expedient means to test sanctions evasion and use Venezuela as a testing ground for Russian cryptocurrency strategy.
Iran has also turned toward digital currency to help skirt American sanctions as the rial experiences a sharp decline. This push gained urgency after the United States abandoned the Iran nuclear pact and restored sanctions, including an impending ban on purchasing U.S. dollars and crude oil penalties. Iran is moving forward with an indigenous cryptocurrency to tokenize the rial, even as it prepares for additional U.S. sanctions to take effect.
The United States reacted by barring Americans from using the petro, while Venezuela's National Assembly tried unsuccessfully to stop the token's creation. While Venezuela and its allies sought to circumvent international restrictions as a step toward skirting U.S. sanctions, the U.S. Treasury clarified that sanctions compliance obligations apply equally to digital assets and fiat currencies alike.
