Venezuela is already known for adopting cryptocurrencies to free itself from the shackles of Hyperinflation by developing its own digital currency Petro. Very recently the nation’s President Nicolas Maduro has announced that the country is aiming to set up a cryptocurrency payments method for the public.
In a press conference held on September 30, the president of Venezuela confirmed that the Venezuelan government will be using cryptocurrencies as a “method for free national and international payments.” He further said that:
“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.”
As of last week, Bloomberg reported that the nation is running tests whether holding cryptocurrencies in its reserve is possible. These moves come at the request of the state-owned oil and natural gas company, Petroleos de Venezuela SA (PDVSA). According to the source, the organization is planning to tokenize the business by sending Bitcoin (BTC) and Ethereum (ETH) to the central bank of Venezuela and have them pay the companies suppliers in the token, the reason being international economic sanctions. However, how the PDVSA came to possess cryptocurrencies is a controversial matter.
Focusing on international sanctions the President of the nation elaborated:
“Donald Trump and his sanctions are blocking Venezuela from carrying out transaction in any of the world’s banks,”. He further commented “There’s other formulas to pay, and it’s what we’re using, because our payment system works perfectly in China and Russia.”
Venezuela has been facing financial breakdowns due to financial instability with U.S sanctions isolating the nation from the global financial system. The country has already failed once in implementing cryptocurrencies to be used nationwide, but their continued efforts to use cryptocurrencies to recover from this financial mess is proof of desperation of the government.
The oil-producing nation has been struggling to obtain payments from their customers via conventional channels with the added disadvantage of businesses hesitating to transact with a sanctioned entity. Cryptocurrencies may be the only way out but it is yet to be seen whether this technology can help bring Venezuela back to its feet.