Venezuela Turns to Tether to Skirt US Oil Sanctions: Report

Venezuela’s oil industry is set to soon return under U.S. sanctions after a six-month hiatus, and the economic fallout is reportedly prompting the South American country to accelerate the adoption of cryptocurrencies in oil trading. It has been reported.

In an effort to encourage Venezuela’s leadership to hold fair presidential elections in July, the United States implemented General License 44, which authorizes transactions related to the operation of the oil and gas sector in Venezuela. However, after the election of opposition candidate Maria Colina Machado, banned from running The license was revoked by the government of President Nicolas Maduro.

Amid political turmoil, Venezuela’s state oil company PDVSA plans to increase the use of digital currency in its crude oil and fuel exports. According to sources cited by ReutersThe move is aimed at reducing the risk that sale proceeds will be frozen in overseas bank accounts due to the reinstatement of sanctions.

As President Maduro himself admitted, Venezuela has been using cryptocurrencies for years.but Reuters According to the report, PDVSA has moved many spot oil trades this year to a contractual model that requires upfront payment of half the value of each cargo in USDT stablecoin, even during the suspension of sanctions. The reinstatement of oil sanctions is merely accelerating this change.

Additionally, PDVSA is reportedly requiring new customers trading in oil to hold cryptocurrencies in a digital wallet.

The move by PDVSA is more a matter of convenience than strategy, as Tether, the blockchain platform underlying USDT, has a track record of blocking crypto addresses identified by law enforcement as belonging to sanctioned individuals. It may be driven by.In reality, more bans were enacted. Only on this day.

“Tether respects the Office of Foreign Assets Control’s (OFAC) SDN list and will work to ensure that sanctioned addresses are promptly frozen,” the company said. Said Crypto Slate.

according to dune analysisTether voluntarily blocked 1,426 USDT addresses, freezing over $1 billion in funds.

In early 2018, Venezuela announced its intention to launch a native cryptocurrency. First proposed to run on the Ethereum blockchain, the token was censorship-resistant and prepared for easy trading. After a few months, governments moved to private blockchains, which were later targeted and sanctioned by the United States, hampering global adoption.

The coin disappeared in 2024 after a massive corruption scandal ended with the oil minister and cryptocurrency regulator in custody. Both men are wanted by the U.S. government on corruption charges.

Venezuela’s oil exports increased during the hiatus. The country’s oil ministry confirmed that the country was exporting nearly 1 million barrels a day, the highest in four years.

President Nicolas Maduro remains defiant despite sanctions. “Even if there are sanctions, blockades and threats, we will move forward towards the development of the country and the peace of our people,” he said. tweeted yesterday.

The shift to cryptocurrencies in oil trading is an important move for Venezuela as it seeks to maintain oil exports in the face of foreign sanctions. But relying on intermediaries for transactions could result in some of the oil revenue going into PDVSA’s pockets. Venezuela’s recent corruption scandal involved $21 billion that PDVSA executives hid from the government using cryptocurrencies.

”[PDVSA executives] There was a way to hide funds in cryptocurrencies,” said Nicolas Maduro. said on TV. “What was created for good was a haven for the mafia, delinquents, and traitors.”

Meanwhile, Venezuelan Petroleum Minister Pedro Telechea said the country plans to continue signing contracts and expanding oil and gas projects during the 45-day relaxation period set by the United States, after which it will not be able to identify potential customers. He said he would request a license for the same.

Edited by Ryan Ozawa.

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