Bloomberg: Venezuela Considers Cryptocurrency as International Reserve Currency

According to Bloomberg, people familiar with the matter revealed that the Central Bank of Venezuela is conducting internal tests to determine whether it can reserve cryptocurrencies internally.

This is at the request of state-run Venezuelan oil company PDVSA, which is seeking to send bitcoin and ether to the central bank and ask the financial authority to use the tokens to pay the oil company's suppliers, people familiar with the matter said. The bank is also studying the possibility of including cryptocurrencies in international reserves, which are currently at a three-decade low of $7.9 billion.

Due to U.S. sanctions on Venezuela, the country has been largely isolated from the global financial system, exacerbating the domestic economic crisis and forcing the government to use multiple methods to transfer funds. Venezuelan President Maduro previously launched the world's first sovereign cryptocurrency and subsequently promoted the use of digital currency in the country, indicating that the government is eager to find a way to get rid of these restrictions.

It is not clear how PDVSA owns Bitcoin and Ethereum, the report said. However, the oil producer has been struggling to get customer payments through traditional channels as major banks are reluctant to do business with sanctioned entities. Last month, the company received a payment of 700 million yuan thanks to the efforts of all parties.

PDVSA may be reluctant to sell cryptocurrencies on the open market, as this would require the company to register with exchanges and be subject to investigation. Instead, it wants the central bank to use these cryptocurrencies to pay PDVSA's creditors. Officials at the oil company believe the central bank is unlikely to be swayed by the potential risks.

In addition, in order to protect itself from further sanctions, the Venezuelan government is also considering the possibility of using an international payment system operated by Russia to replace the SWIFT system used by most financial institutions.

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AuthorLiang CHE

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