Officials from Venezuela and Russia recently got together at a high-level meeting in Caracas where they talked upon different aspects of a “strategic partnership” to expand the economic cooperation between the two countries. Multiple topics were covered amongst which the most interesting being the use of Petro - Venezuela’s state-issued cryptocurrency, to buy automobile parts from Russia.
Apparently, the South American country plans to assemble Russian Kamaz trucks and will purchase the automobile parts from Russia by paying for them in Petro. The oil-backed national cryptocurrency will be used to buy things like tires, batteries, and spare parts as disclosed by Venezuelan minister of foreign trade, Jose Vielma Mora.
With this event, the two nations increased the volume of their bilateral trade up by 30%. Besides the above-mentioned venture, the two countries have also talked about joint projects in areas like energy, construction, and even military. A new alliance between energy companies Rosneft and Petroleos de Venezuela is also something we are likely to see.
It seems that the new economic bond was a consequence of the intensifying western sanctions that have been imposed on both the nations. For example, US president Donald Trump recently signed an executive order which prohibited US citizens from dealing with Venezuelan cryptocurrencies.
The Venezuelan government introduced their state-backed cryptocurrency to bypass US sanctions. However, when that too was opposed by president Trump, it angered many government officials in the country.
Russia also seems on the verge of introducing their own state-issued cryptocurrency. Cryptoruble, Russia’s virtual national currency had already been proposed but also postponed. However, discussions are underway regarding the use of distributed ledger technologies for improvement in process transactions and transmission of financial information. President Putin’s advisor has also expressed the possibility of a national cryptocurrency by the end of the year.