India recently rejected a proposal from Venezuela to get a 30 percent concession on its state-backed currency named Petro. In order to grow in one of the most populated countries of the world, a continuous supply of oils and coins is necessary which is a bit shaky, considering the Venezuelan economy. The country is stuck in the worst economic crisis it has ever faced mainly due to US sanctions on its virtual coin, that have forced the nation to adopt desperate measures.
Sushma Swaraj, Foreign Minister India, “We cannot have any trade in cryptocurrency as the Reserve Bank of India bans it. We will see which medium we can use for trade.” She spoke in a conference which was meant to emphasize on the relations between India, Iran, and Venezuela.
Both Iran and Venezuela have been facing strict sanctions from the US. India imports oil from Iran, which has not been on good terms with America. It is also being rumored that Iran is trying to develop its own digital currency backed by its oil economy. However, Venezuela is ready with world’s first fiat digital currency, Petro, to lure its customers and their investments.
Earlier this year, Nicolas Maduro, President of Venezuela, came up with a two-fork strategy to consistently provide oil for a nation of over a billion people. His plan included the adoption of Petro for recovering the economy from on-going damage. He also proposed a discount of 30 percent if India pays Venezuela in Petro. But, India made ties with Iran over US dollar for future oil trades.
India always had a half-hearted relation with digital currencies. Central Bank of the country has banned all other banks from dealing in virtual coins which have murdered the crypto space of the nation. The country is exploring the possibilities of launching a state-backed virtual coin named Laxmi.
It also ordered the banks to curb any activities related to the trade of digital currencies. Cybercrime, fraud, and terrorism are the reasons given by RBI for its current actions. However, the decision has increased the popularity of virtual coins in the country. Even after suffering massive losses due to RBI’s actions crypto supporters of the country have used the three-month window to trade digital currencies.
Experts believe that India has avoided new relations with Venezuela under the fear of repercussions from US authorities. Ms. Swaraj added, “The broader strategy of shunning countries such as Iran and Venezuela” is not due to US reprisal fears. “We don’t make our foreign policy under pressure from other countries. India follows only UN sanctions and not unilateral sanctions by any country,” she said.
Venezuela is trying every measure to boost its economy from the destruction of hyperinflation. But, they have also banned the import of mining hardware in the country which means that they don’t want citizens to invest in any other virtual coin. The situation is so intense that people do not have enough money to buy even a cup of coffee. It is evident that Venezuela has been disappointed by India’s reply, but they cannot lose hope as they do not have any other resort for a better economy.
