Venezuela and Russia are in talks for using state-owned crypto Petro for bilateral trade between the two countries. The talk of bilateral trade is a direct result of the USA putting various trade sanctions on Venezuela which has made the economic condition of the already troubled nation to go from bad to worse.
Petro. the state-owned crypto of Venezuela was created as a countermeasure to the US trade sanctions, however the hurry to complete the project resulted in an inefficient crypto token, with no clarity over its working and which platform the token was based upon. This resulted in the US putting sanctions over the use of Petro as well.
The main reason for Russia getting involved in trade talks with Venezuela is because it is an ally who has reportedly helped Venezuela in their crypto project as well. The final white paper of the Petro mentions that it has been certified to be used by Russian security analysts. Another reason is the USA since most of the international trades are commenced in USD.
The use of USD for all international trades has prompted the new emerging superpowers like China and Russia to completely discard USD and look for alternatives to it.
Earlier it was planned that the trade between Russia and Venezuela will be commenced in Russian Rubel, however, Venezuela’s inflation has crossed 0 million percent this year as per the data presented by International Monetary Fund (IMF). The international debt has also touched $140 billion marks, thus the country is highly dependent on Russia for its revival.
The use of cryptocurrency in the global trade market is still haven’t picked up the pace, so it is to be seen how successful the venture and partnership between Russia and Venezuela become and whether it would be able to put behind the sanctions of the US and use of US Dollars.