The Trump administration has banned US citizens and firms from conducting all transactions related to any digital currency issued by the Government of Venezuela on or after 9 January.

The target of this Executive Order, which President Trump issued under the International Emergency Economic Powers Act, the National Emergencies Act and section 301 of the US Code, and which took effect on 19 March, is the Venezuelan Petro, a cryptocurrency backed by the country's oil reserves that the Venezuelans launched in the hope that it would quell inflation and help the country to circumvent US-led financial sanctions. The Petro is, indeed, the first government-backed 'crypto' in the world.

Such a currency runs counter to US foreign policy on general principles. In 1974 President Nixon, who had taken the US off the gold standard, struck a deal with Saudi Arabia to ensure that anybody in the world who buys oil had to do so in US dollars. The Saudis did so through a proclamation by the Organisation of Petroleum Exporting countries, which they dominated. In return, the US agreed to defend the kingdom from all comers and sweetened the deal by giving the Arabs military supplies and equipment. This deal still stands and all large oil transactions are dollar-denominated.

Investopedia notes: "Since the most sought-after commodity in the world - oil - is priced in US dollars, the petrodollar helped elevate the greenback as the world's dominant currency. In fact, according to the Bank for International Settlements' triennial survey, 87% of all foreign exchange deals initiated in April 2013 involved the US dollar on one side. With this status, the US was able to enjoy what some have asserted to be an "exorbitant privilege" of perpetually financing its current account deficit by issuing dollar-denominated assets at very low rates of interest, as well as becoming a global economic hegemony."

The executive order says that the President signed it "in light of recent actions taken by the Maduro regime to attempt to circumvent US sanctions by issuing a digital currency in a process that Venezuela’s democratically elected National Assembly has denounced as unlawful."

The term “United States person” means any United States citizen, permanent resident alien, entity organised under the laws of the United States or any jurisdiction within the United States (including foreign branches of such entities), or any person within the United States.

In August last year, President Trump signed an executive order that imposed economic sanctions on Venezuela because, ostensibly, of the Venezuelan Government's corruption, violence and abuse of human rights. US citizens are barred from lending Venezuela any money. The order also prohibits “any transaction that evades or avoids” the order.