Venezuela’s state-owned oil company, PDVSA, is using Tether as a way to bypass US sanctions and secure oil deals, drawing criticism and apprehension due to the potential risks associated with relying on intermediaries.
Venezuela’s Response to Sanctions
To bypass U.S. sanctions, Venezuela has chosen to use the cryptocurrency Tether (USDT) for its external business deals, particularly for its national oil company, PDVSA.
Due to US sanctions blocking conventional economic channels, Venezuela has adopted cryptocurrencies, particularly Tether (USDT), as an alternative for international deals, especially in the oil trade.
With this tactic, we hope to minimize interruptions that might result from sanctions. It’s also in line with the developing practice of using cryptocurrencies for global commerce, despite being a relatively new concept.
US Pressuring Venezuela For Electoral Reforms
The United States has imposed sanctions on Venezuela in the past few days, intending to limit financial dealings and seize funds from foreign banks associated with Venezuela’s oil revenues. This action by the US is not unique but rather part of a broader international approach, as the US attempts to influence Venezuela towards political changes, particularly in its election procedures.
The US Treasury has chosen not to extend the permit for PDVSA’s business activities, giving the company until the end of May to wind down its operations.
Oil Minister Speaks For Digital Currencies
Based on Pedro Tellechea’s statements, Venezuela’s oil ministry employs diverse currencies for distinct contracts. In specific situations, digital currencies are becoming the favored method of transaction.
Under Tellechea’s guidance, Venezuela’s daily oil exports rose to approximately 900,000 barrels in March – the highest figure in the past four years. PDVSA shifted its oil sales tactics, converting numerous spot transactions into contractual agreements that required prepayment for half of each cargo’s value in USDT.
Challenges and Skepticism
In contrast, the shift to USDT encounters obstacles, particularly within the trading industry. Big deals like oil transactions carried out in USDT remain rare and spark wariness among traders.
One oil trader stated,
USDT transactions, as PDVSA requires, are rejected by traders’ compliance departments. Thus, the most effective solution is collaborating with a middleman to facilitate these transactions.
The dependence on intermediaries carries a risk since they pocket a portion of the oil revenues, possibly decreasing the amount that ultimately reaches PDVSA’s accounts. However, despite these obstacles, PDVSA insists that any new clients engaging in oil deals must possess cryptocurrency in a digital wallet, even in previous contracts that didn’t mention using USDT.
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2024-04-23 18:09