Odaily Frontline | Can the Bitcoin and Ethereum of the Venezuelan Petroleum Company be placed in the central bank's reserves?

This article comes fromBloombergBloomberg

Odaily Translator |

, Original Author: Alex Vasquez & Patricia Laya

Odaily Translator |

Venezuela’s central bank is conducting internal tests to see if it can hold cryptocurrencies in its treasury, according to four people with direct knowledge of the matter.

The test was in response to a request from Venezuela's Petroleos de Venezuela SA, or PDVSA, which was seeking to send bitcoin and ethereum to the central bank and use the cryptocurrencies to its suppliers, the people said. Payment. Central bankers are also working on proposals to include cryptocurrencies in international reserves. It is reported that Venezuela's current international reserves are US$7.9 billion, the lowest in nearly three decades.

U.S. sanctions on Venezuelan President Nicolas Maduro's authoritarian regime have largely isolated Venezuela from the global financial system, exacerbating one of the world's worst economic crises and forcing officials to use a variety of methods transfer funds. Although Maduro's previous attempts to launch the world's first sovereign cryptocurrency (the Petro) largely failed, he has not given up - repeated efforts to introduce multiple measures to promote the use of digital currencies show how serious the government is. Desperate to find a way to get around the shackles of US sanctions.

A press officer for Venezuela's central bank did not respond to a request for comment.

It is unclear how PDVSA owns bitcoin and ethereum, or how much it holds. But the oil producer has struggled to get payments from customers through traditional channels because of the reluctance of major banks to do business with a sanctioned entity. Last month, the company received payments worth $700 million, mostly in Chinese yuan, after all parties struggled to find financial institutions that could broker the deal.

PDVSA may be reluctant to sell its cryptocurrency on the open market, as that would require the company to register with an exchange and undergo due diligence. Therefore, it wants to use cryptocurrencies to make payments to entities through the Central Bank of Venezuela. There are reasons for this choice, and PDVSA officials believe that the central bank is less likely to be blocked.

Bitcoin and Ethereum use blockchains to verify and record transactions. In some cases, it allows for relatively anonymous transfers without the need for a middleman. Few banks would be willing to touch digital tokens as it could raise KYC and money laundering concerns and lead to compliance issues.