The U.S. on Monday banned its citizens and anyone within the country from trading in or financing Venezuela's Petro cryptocurrency.
President Donald Trump's executive order does not single out the Petro, but prevents U.S. nationals from any dealings in a digital currency, coin or token issued by the Venezuelan government.
In the order, Trump called the currencies an effort to "circumvent U.S. sanctions by issuing a digital currency in a process that Venezuela's democratically elected National Assembly has denounced as unlawful".
Venezuela President Nicolas Maduro launched the Petro in February as his country reels from an economic crisis brought on by the global plummet of the price of oil.
A senior administration official told reporters on a conference call that the U.S. expects Monday's cryptocurrency order to have a "minimal" effect on the Venezuelan people.
"Due to the corruption and economic mismanagement of the Venezuelan government it is highly unlikely that the people of Venezuela would ever be able to use a Venezuelan digital currency, simply because there is no hard currency with which to buy a digital currency," the official said.
Any buyers who purchased or invested into the Petro prior to Monday's announcement will not be penalized for past actions, but will be forced to avoid any dealings in it going forward, another official, who likewise briefed reporters on condition of anonymity, said.
The penalties went into effect beginning at 12:15 EDT (1615 GMT).
The U.S. further sanctioned four current and former Venezuelan officials including Americo Alex Mata Garcia, whom the Treasury Department described as the alternate director on the board of directors of the national bank of housing and habitat, and Willian Antonio Contreras, the head of the Superintendency for the Defense of Socioeconomic Rights agency.
Treasury Secretary Steve Mnuchin said he participated in a multilateral meeting in Argentina Monday to discuss "our shared objectives of restoring Venezuelan democracy, combating the kleptocracy of the Maduro regime, and responding to the humanitarian crisis caused by Maduro’s economic policyå.
"We urge Maduro to distribute humanitarian aid and stop blocking much-needed foreign assistance to the suffering people of Venezuela, and we again call upon the Venezuelan military to respect and uphold the Constitution," he said in a statement.