The government of India has formally rejected Venezuela’s state-backed cryptocurrency, the petro, despite an attempt to entice India with a 30% discount. Dependent on the Latin American country’s oil, a steady, uninterrupted supply is key to growing one of the world’s most populous nations. Venezuela is in the midst of dramatically bad economic fortune compounded by US sanctions, forcing its government to devise ever-more creative ways to stay afloat.
Indian foreign minister Sushma Swaraj explained, “We cannot have any trade in cryptocurrency as it is banned by the Reserve Bank of India. We will see which medium we can use for trade.” She was speaking during a conference designed to highlight ties between her country, Venezuela, and Iran.
Both countries courting India are the focus of US economic ire and tightening sanctions. Iran also supplies India oil, and it too has been the subject of more bellicose attitudes from the current American administration. Rumors have long swirled regarding the Islamic Republic flirting with its own version of a state-backed crypto. So far, only Venezuela has officially rolled out a currency specifically designed to thwart sanctions, the petro.
Back in late April of this year, the president of Venezuela Nicolas Maduro proposed a two pronged strategy to keep oil flowing for the more than a billion persons of the subcontinent, while at the same time increasing adoption of the petro. Essentially, should India make payment in petros Mr. Maduro promised substantial price discounts of up to 30%. It wasn’t as long a shot as imagined: Iran and India agreed to forgo using US dollars in future oil trade.
India has its own tepid relationship with cryptocurrency, as its central bank has moved hard against adoption, employing legal measures and law enforcement to combat domestic interest. Its central bank just a month ago banned all institutions under regulatory purview from dealing in cryptocurrency, insisting they must prohibit its use and purchase.
Banks too may not even settle in decentralized money. The government has used recurring themes of terrorism and crime to go so far as to remove popular lower level fiat denominations from circulation. Due to such cockeyed intervention and the resultant instability, cryptocurrency has gained in popularity in the country.
On the broader strategy of shunning countries such as Iran and Venezuela due to US reprisal fears, “We don’t make our foreign policy under pressure from other countries,” Ms. Swaraj stressed. “India follows only UN sanctions, and not unilateral sanctions by any country.”
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