Russia’s involvement shows how cryptocurrencies might give international leaders a headache. Russia, who is also the target of sanctions by the US and Europe, has obviously been using Venezuela as a guinea pig. Venezuela is cash strapped, and cryptocurrency offers an easy way for the government to gain international fiat. Russia has been investigating ways to circumvent the West’s sanctions, and crypto could be the answer. Although the Petro’s roll out was shaky, there are two important things to remember when examining its effect.

First, Maduro, Venezuela’s President, has claimed the Petro has been a success. He claims millions of dollars has been acquired by the government through sales to various entities and people around the world. Now, claims like these should be taken with a grain of salt. However, Maduro is still going through with his plan to have the Petro being accepted for all government functions, including taxes, and has been pushing for private businesses to accept the coin. If the Petro could be massively adopted by the population, many of whom already use Bitcoin for day to day purchases, it could be a big step for stability. However, the Venezuelan people don’t trust the government, so that seems unlikely.

Second, if the currency is even a minor success, it could serve a blueprint for other states under sanctions, namely Russia. Venezuela’s infrastructure and international standing is currently weak, so the Petro already had a lot stacked against it. However, if Russia can learn from the mistakes regarding the Petro, a Russian state-backed cryptocurrency could be quite successful. Using Venezuela as a guinea pig, other nations can easily develop state-backed cryptocurrencies that address the problems the Petro has. This could spell doom for the Western dominated international system. If pariah states can raise international funds by creating cryptocurrencies, already weak international sanctions could be found worthless.

This would cause major upheaval in the international system. Sanctions often work in getting states to a negotiating table, whether its Iran or North Korea. However, if these states can find it easier to maintain their regimes or nuclear programs and still have the ability to bypass international sanctions they would take it.