Venezuela tested keeping cryptocurrencies in the bank

Venezuela’s central bank conducts many tests to see if it can keep cryptocurrencies in the treasury, while Venezuela’s largest oil company wants to pay suppliers with bitcoin and ethereum.

According to Bloomberg, a source said it was an effort at the request of Petroleos de Venezuela (PDVSA), a state-owned oil and natural gas company. PDVSA is seeking to send bitcoin and ethereum to the central bank and wants the monetary authority to pay its suppliers in cryptocurrency.

In addition, Venezuelan central bank members also studied the proposal to allow cryptocurrencies to be included in international reserves. The international reserves of the South American nation are near the lowest level in three decades, at US $ 7.9 billion.

The sanctions imposed by the US on the regime of Venezuelan President Nicolas Maduro largely isolated Venezuela from the international financial system, exacerbating one of the world’s most severe economic crises, forcing gender. The organization must use skillful methods to transfer money.

Continued use of cryptocurrencies after a failed private cryptocurrency launch shows how desperate Venezuela is in finding a way to circumvent sanctions.

It’s unclear why PDVSA owns bitcoin and ethereum, and it’s unclear how much cryptocurrency the company holds. Oil producers have struggled to get customers to pay through regular channels because many large banks are reluctant to do business with a punitive entity.

Last month, the company received most of the $ 700 million payment in yuan after parties had difficulty finding financial institutions to facilitate transactions.

PDVSA may be hesitant to sell the cryptocurrencies they currently have on the open market as this requires businesses to register with an exchange and be tested. Therefore, it wants the central bank, where officials are less likely to be exposed to potential bans, to use cryptocurrencies to pay debt to the parties it owes.

Bitcoin and ethereum use decentralized, online ledgers called blockchains to verify and record transactions. In some cases, this practice allows for relatively anonymous transfers without intermediaries. Very few banks involve cryptocurrencies because of money laundering regulations and many other legal compliance issues.

As of early morning 27.9, the price of bitcoin was 7,960 USD while ethereum reached 160.5 USD, according to Coinmarketcap.

For Venezuela, in order to protect itself from sanctions, the government considers switching to Russia’s international payment messaging system, created to replace the Inter-bank Telecommunications Association and the national finance. (SWIFT) that most financial institutions are using.