Venezuela will not be allowed to repay its debts to Russia in the newly launched petro cryptocurrency, according to statements from a senior Russian official today.
Konstantin Vyshkovsky, who is responsible for state debt at the Russian Finance Ministry, made the comments in relation to a debt of $3.15 billion owed by Venezuela to Russia over the course of the next decade.
He clarified that Venezuela had not asked for any of its debts to be repaid in petro tokens, but in any event suggested Russia would not be willing to accept repayments in the new cryptocurrency.
The petro has been highly controversial, both in Venezuela and internationally, where it is regarded as a device to evade US sanctions. From a domestic point of view, opponents of President Nicolas Maduro say the currency in unconstitutional, and represents unapproved state borrowing, secured against the country’s oil reserves.
The news comes just days after media reports of Russian support and possible involvement in the development of the petro. According to Time Magazine, Russia’s President Putin personally approves of the Venezuelan project, as a means for circumventing US sanctions.
Furthermore, he is reported to have described the project as a “collaboration” between Russia and Venezuela. Time went on to disclose evidence of involvement from two Russian billionaires, Fyodor Bogorodsky and Dennis Druzhkov, in assisting with the development of the currency.
However, Russia has been quick to dismiss the reports as “fake news”, a charge led by Artyom Kozhin, the Deputy Director of the Information and Press Department of the Foreign Ministry.
“In no way, have the Russian financial authorities ever participated in this project. During the course of the meeting held on February 21, 2018 in Moscow, Venezuela’s Minister of Economy and Finance Mr. Zerpa indeed handed over a booklet on the cryptocurrency to the Russian Finance Minister exclusively for the purpose of informing Russian partners about this project…[the report] is a blatant lie.”
The news comes just days after President Trump agreed to new sanctions for Venezuela over the petro, writing into law US criticisms over the controversial cryptocurrency.
While the Venezuelan state confirms the sale of the petro has so far generated in excess of $5 billion, there has as yet been no evidence offered to back up the figures.