The Venezuelan government is in the process of testing whether or not it can hold cryptocurrencies in its national reserves, according to a new Bloomberg report. The report cited “four people with direct knowledge of the matter.”
The motivation behind the testing comes on two fronts: first, the Petroleos de Venezuela SA (PDVSA), Venezuela’s state-owned oil and natural gas company. The four sources claimed that the company is seeking to send BTC and ETH tokens to the country’s central bank and that the company hopes that its suppliers can be paid with the crypto tokens.
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The second piece of motivation behind the testing comes from several proposals to allow cryptocurrencies held by the government to be counted in the country’s international reserves, which sit at just $7.9 billion.
Of course, it’s possible that PDVSA could sell its cryptocurrency on the open market–however, Bloomberg pointed out that the company may be hesitant to do so because “it would require the company to register with an exchange and subject itself to due diligence…it wants the central bank, which officials at the oil company believe is less exposed to potential blocks.”
Sanctions have contributed to Venezuelan desperation
In varying capacities, Venezuelan citizens and the Venezuelan government have increasingly turned to cryptocurrencies. US Sanctions against President Nicolas Maduro’s authoritarian regime have isolated Venezuela from the world economy, which has worsened the country’s economic crisis and fueled a number of hail-mary passes and last-ditch efforts to move money around.
Perhaps the most famous of these efforts was the creation of the Petro, a national cryptocurrency that was allegedly backed by oil and other commodities. The project, which was viewed as a covert attempt to access international debt markets, has flopped.
El Superintendente @JoselitRamirez El Petro representa lo que pudiese ser el milagro económico en los próximos años para pueblos que están esperando liberarse de las ataduras que tienen con el sistema financiero tradicional.#VenezuelaPazYSoberaní[email protected] @TareckPSUV pic.twitter.com/TOoxpE2glk
— HeilerDeChavez (@Heiler_gr) June 10, 2019
However, the token sale in which Petro was sold could be somehow connected to the reason that PDVSA owns Bitcoin and Ethereum in the first place. Another theory behind how PDVSA earned its crypto holdings is the possibility that the company’s customers may be paying in cryptocurrency due to the hesitancy that major banks have shown to get involved with Venezuela.