Florida Senator criticizes Venezuela for proposed oil-backed cryptocurrency

Inside Subprime: February 21, 2018

By Caroline Thompson

If it seems like you can’t go an hour without hearing someone wax poetic about a burgeoning cryptocurrency, it’s because everyone and their mother is obsessed with digital cash. The entire world is on the edge of their seats, watching Bitcoin as it rises and falls, writing think pieces about a cashless economy and, in the case of Venezuelan president Nicolas Maduro, creating new oil-backed national cryptocurrencies to avoid international financial sanctions!

According to a statement published on the Venezuelan government’s website (and translated by CoinDesk), the move to create a new form of currency, called a “petro,” comes in the wake of a ever-worsening financial crisis in the country. Maduro believes the new currency will “advance monetary sovereignty, as it will help to overcome the financial blockade and thus move towards new forms of international financing for the economic and social development of the country.”

Essentially, Maduro is hoping to avoid having to pay the sanctions recently put into place by U.S. President Donald Trump, by creating a currency that doesn’t apply to these new rules.

But the petro is not popular. Politicians around the world, including many in Venezuela, are denouncing the idea as a fantasy. Here in the States, Republican Senator Marco Rubio of Florida and Democratic Senator Robert Menendez of New Jersey have released a statement condemning the petro:

“We have serious doubts about whether Venezuela has the capacity to launch a cryptocurrency, but regardless, it is imperative that the U.S. Treasury Department is equipped with tools and enforcement mechanisms to combat the use of cryptocurrency to evade U.S. sanctions in general, and in this case in particular,” the two lawmakers wrote in a recent statement.

While Rubio’s concern for the Venezuelan economy is admirable, he may want to take a look at the financial issues currently plaguing his home state of Florida. As we reported earlier this month, Florida is moving forward with legislation that would create a new category of payday loans, one which could spell disaster for seniors in the Sunshine State. The high rates on payday loans in Florida are already an issue, and this new product could double the fees predatory lenders are allowed to charge borrowers, many of whom have nowhere else to turn.

Whether or not the petro becomes the next hot cryptocurrency, Rubio may want to save his voice to speak out agains the cycle of debt perpetrated by Florida payday lenders. Sadly, given that the Florida Senator would rather dismantle the agency that holds these lenders accountable than help Florida residents avoid falling victim to predatory lenders, that doesn’t seem likely.

To learn more about the dangers of predatory loans in Florida, check out these related pages and articles:

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