Connect with us

Hi, what are you looking for?

Economy

Venezuela’s Oil Giant Turns to Crypto as US Sanctions Bite Again

Prompted by renewed US oil sanctions, Venezuela’s state-controlled oil company PDVSA intends to boost its use of digital currencies in crude oil and fuel exports, Reuters reported on Monday.

The development follows reimposed sanctions on Venezuela’s oil industry after the Biden administration last week refused to renew a license easing restrictions.

This forces companies to wind down transactions by May 31 under a general license. It also makes it harder for Venezuela to export oil. The sanctions are a response to President Nicolas Maduro’s failure to fulfill commitments made after an election deal.

Reuters reported that PDVSA has been quietly increasing its use of digital currency, particularly Tether (USDT), for oil sales since last year. The move aims to avoid frozen accounts due to US oil sanctions, according to Reuters.

Venezuelan oil minister Pedro Tellechea confirmed the country’s openness to using various currencies, including virtual assets, in oil contracts.

The oil market has historically revolved around the US dollar. This dominance stems from the “petrodollar” arrangement established in the 1970s. As a result, oil prices are universally quoted invoiced in US dollars, solidifying its position as the standard currency for oil transactions.

Venezuela’s Oil Exports Rebound Despite Past Corruption Scandal


Venezuela’s oil exports have seen a resurgence under its new oil minister Tellechea. This is despite a corruption scandal at PDVSA uncovered last year involving $21b in oil export receivables (including past crypto transactions).

Exports reached a four-year high of 900,000 barrels per day in March, buoyed by US licenses permitting sales. PDVSA has shifted to a new contract model for spot oil deals to mitigate risk from potential future sanctions. Under this model, the firm requires half the value of each cargo to be prepaid in Tether (USDT).

Venezuela Enforces Crypto Wallets for Oil Deals


Venezuela’s push for digital currency goes beyond just accepting Tether for oil sales. The firm is now reportedly mandating new customers to have a digital wallet holding crypto. The mandate is also enforced on some existing contracts that didn’t previously specify using USDT. This suggests a broader strategic shift towards digital currencies in the oil trade.

Earlier this month, authorities arrested former Vice President Tareck El Aissami. He was accused of being the mastermind behind a scheme to embezzle funds from oil sales using crypto.

El Aissami had reportedly been evading capture for a year after allegedly converting cash into cryptocurrencies and potentially transferring them to crypto exchange Kraken. This high-profile corruption case has been dubbed the “PDVSA-crypto incident.”

The post Venezuela’s Oil Giant Turns to Crypto as US Sanctions Bite Again appeared first on Cryptonews.

Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Economy

Pavel Durov, the founder of Telegram, has received a generous donation from over half a million players of the viral Telegram-based clicker game called...

Economy

The crypto industry has made a record $94 million in political donations since 2023 in an effort to support pro-crypto governance. According to a...

Economy

As the Floki (FLOKI) bulls eye a quick 50% rally from current levels around $0.00021 to yearly highs above $0.00031 after a key technical...

Economy

Bank of America (BAC) upgraded its rating on Coinbase (COIN) shares from underperform to neutral on Friday and raised its price target for Coinbase to...

Economy

In a major move, Turkey drafted a crypto bill, tabled by the ruling party (AK Party) Group Chairperson Abdullah Güler on May 16, to...

Economy

Hong Kong became the first region outside mainland China to allow users to open digital wallets and hold China’s CBDC e-CNY, otherwise known as...

You May Also Like

Financial Advisors

[#item_full_content]

Financial Advisors

[#item_full_content]

Financial Advisors

The humongous outbreak of the dreaded coronavirus has brought about a groundbreaking change in what the world perceived as ‘normal’. With an estimated 280,391,189...

Disclaimer: Respect Investment.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2024 Respect Investment. All Rights Reserved.