Venezuela hopes to pay off its US$3.15-billion debt to Russia with its new cryptocurrency. But Russian Finance Ministry announces it won’t be accepting digital coin.
The head of the Russian Finance Ministry’s state debt department Konstantin Vyshkovsky has said Venezuela will not be paying any part of its debt to Russia with its cryptocurrency.
In November last year, Russia threw a life-line to Venezuela after the two countries signed a deal to restructure US$3.15 billion worth of Venezuelan debt owed to Moscow. Under the terms of the deal, Venezuela will be repaying the debt over the next ten years, of which the first six years include “minimal payments”.
Venezuelan President Nicolas Maduro announced on the following month that his country would be issuing an oil-backed cryptocurrency called Petro.
The U.S. President Donald Trump banned U.S. purchases and dealings of any digital coin or token issued by Venezuela.
Last week, Time magazine reported that Russia secretly helped Venezuela in creating the Petro, with the purpose of undermining the power of U.S. sanctions, the magazine reported, citing sources familiar with the effort.
The Deputy Director of the Information and Press Department of the Russian Foreign Ministry, Artyom Kozhin pointed that Russia and Venezuela had never cooperated on the development of the Venezuelan cryptocurrency.
Russia and China are the last holdouts that still finance Venezuela, which is digging deeper into the downward spiral of economic crisis, hyperinflation, and crumbling oil production. However, China is reportedly thinking of cutting off Venezuela from new loans. This would leave Russia as the only financial supporter of the Maduro regime, and if all it’s got is a crypto coin that no one really believes in to pay off debt, loans are likely to be plentiful.