Venezuela reportedly using Tether to conduct oil sales, evade U.S. sanctions

(Kitco News) – Venezuela’s state oil company PDVSA is using the stablecoin Tether (USDT) to circumvent U.S. sanctions, according to three people familiar with the plan, and is using the stablecoin Tether (USDT) to export crude oil and fuel. reportedly plans to increase the use of digital currencies in .

Reuters first report For this article, the U.S. Department of the Treasury said it has directed PDVSA customers and providers to curtail transactions under general licenses that were not renewed due to lack of election reform by May 31st.

The non-renewal comes on the heels of a corruption scandal in recent years in which authorities uncovered $21 billion in unaccounted for oil exports, some of which was related to past transactions involving other cryptocurrencies.

The lack of a general license will make it more difficult for Venezuela to increase oil production and exports, as companies must wait for individual approval from the United States to operate in the country.

PDVSA began selling oil through USDT in 2023, but the reimposition of oil sanctions has accelerated that change as the country’s government moves to reduce the risk of sale proceeds being frozen in foreign bank accounts. ing.

“According to what is written in the contract, we are using different currencies,” Venezuelan Oil Minister Pedro Telechea told Reuters, adding that in certain contracts, digital currency is the preferred payment method. He added that it is possible.

By the end of the first quarter, the use of cryptocurrencies had become more prevalent in the company’s system, as PDVSA moved many spot oil transactions without swaps to a contract model that requires half of the value of each cargo to be paid upfront in USDT. have been integrated, officials said.

The company also added that new customers applying for oil trading are required to hold their cryptocurrencies in a digital wallet. This requirement also applies to some older contracts that do not specifically include the use of USDT.

Over the past six months, many PDVSA customers have asked their intermediaries to meet digital trading requirements, as USDT trading does not meet compliance requirements. That means the only way to make the process work is through an intermediary.

The increased use of intermediaries to complete transactions has allowed PDVSA to avoid sanctions, but it has also led to a decline in revenue from oil sales, as each intermediary requires a fee for its services. was also connected.

In response to this report, USDT issuer Tether Said Cointelegraph said it would freeze any addresses associated with sanctioned entities, adding that the company remains committed to halting payments associated with Office of Foreign Assets Control (OFAC) sanctioned entities.

“Tether respects the OFAC SDN list and will work to ensure that sanctioned addresses are promptly frozen,” a Tether spokesperson said.

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