"Venezuela is the best, it doesn't sit idly by even if it is hit by problems."
In response to the United States (US) sanctions, Venezuela is intensifying the use of digital currencies in oil transactions through state oil firm PDVSA which is integrating cryptocurrencies into its payment options for crude oil and fuel exports.
The US Treasury giving businesses until May 31, 2024 to re-align their deal with PDVSA comes as the US pushes for electoral reforms in Venezuela that have yet to be implemented.
Following PDVSA's transition to USDT transactions has been accelerated, PDVSA wants to bypass the complexities of the conventional banking system where digital assets can be seized thus guaranteeing a better revenue stream from its oil sales.
Not only that, PDVSA also set a 50% prepayment of the value of each cargo in USDT for new contracts and instant oil offers excluding swaps while new customers are required to have crypto in a digital wallet if they want to transact with the firm.
However, such actions still face some challenges for example most traders and compliance departments are cautious following USDT and other digital currencies in oil trading is a relatively rare phenomenon in the global market.
As such, PDVSA will often rely on intermediaries who play an important role in ensuring transactions take place especially when dealing with large markets such as China.
There is no denying that the use of cryptocurrencies in oil trading is not widespread, but Venezuela's decision may serve as an example for other countries that are subject to similar economic sanctions even though digital currencies are only accepted in international trade.
In addition to obtaining individual licenses for oil transactions, Venezuela's oil minister Pedro Tellechea said Venezuela will continue to sign contracts and then develop crude oil and gas projects during the freeze period set by the US.
