Venezuela president Nicolas Maduro says the country is to start using cryptocurrency in both domestic and global trade, as part of efforts to neutralize crippling U.S. economic sanctions.
Speaking in the country’s parliament on Sept. 29, Maduro revealed that the move will “give new strength to the use of petro and other cryptocurrencies, national and global, in domestic and foreign trade…”
The country has already been trying to use its national crypto, the petro, for this purpose but without much success.
Maduro was delivering an anti-sanctions law aimed at spurring economic and social development, both paralyzed by U.S. sanctions. The blockade has also throttled Venezuela’s trade relations with much of the world, where the U.S. dollar still dominates.
Now, the oil-rich South American country has set its sights on virtual currency. Venezuela, the world’s sixth largest oil producer, is hoping to leverage cryptocurrencies to compensate for the squeeze in petrodollars arising from the economic sanctions. Bloomberg quoted Maduro as saying:
The finance minister and Venezuela’s central bank have new instruments which we will activate very soon so that everyone can do banking transactions, as well as national and international payments through the central bank’s accounts. Venezuela is working within the cryptocurrency world.
Excoriated by the West, the leftist Venezuelan leader thundered: “Donald Trump and his sanctions are blocking Venezuela from carrying out transactions in any of the world’s banks. There’s other formulas to pay, and it’s what we’re using, because our payment system works perfectly in China and Russia.”
According to the Bloomberg report, the central bank of Venezuela is formally testing whether it can hold crypto in its reserves. The immediate targets include bitcoin (BTC) and ethereum (ETH).
Both assets have been requested by state-run Petroleos de Venezuela SA. The oil company wants to send BTC and ETH to the central bank and then have it pay the firm’s suppliers with the coins, says the report.
Venezuela’s deepening economic crisis has led to a massive adoption of cryptocurrency, with more than $8 million worth of bitcoin traded peer-to-peer each week, Coindance data shows. The government recently signed a new tax agreement that enabled it to start collecting taxes and fees in the petro.
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