Venezuela turns to crypto for oil trade under renewed US sanctions: Reuters
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Venezuela's state oil company Petroleos de Venezuela SA (PDVSA) is turning to crypto for its oil business in response to US sanctions targeting the country's oil and gas industry, Reuters reported on Tuesday.
As mentioned, PDVSA has been using the stablecoin Tether (USDT) for oil exports since last year. In the year By the end of the first quarter of 2024, the company has successfully transferred many spot transactions to contracts that require upfront payment in USDT and is now instructing new customers to make payments through digital wallets.
“USDT transactions, as PDVSA requires them to be, do not bypass the merchant's compliance department, so the only way to make it work is to work with an intermediary,” Merchant explained.
This strategic move comes in the wake of the Biden administration's decision last week to impose sanctions on Venezuela's oil and gas industry. The sanctions were re-imposed after President Nicolas Maduro's government failed to abide by an October 2023 accord signed in Barbados to allow Venezuela to hold competitive presidential elections in 2024.
The Maduro administration has stepped up its crackdown on political opponents, including popular opposition candidate Maria Corna Machado.
Following the 2018 election of President Maduro, which was illegitimate in the US and many other Western countries, the US initially imposed heavy sanctions on Venezuela's oil sector.
However, following an agreement between the Venezuelan government and opposition parties regarding the 2024 elections, the Biden administration eased these sanctions in October of last year.
In the six months since the sanctions were lifted, Venezuela has been able to increase its oil production to nearly 900,000 barrels per day, most of which goes to China and a large share to the US.
USDT has become one of the most popular methods of circumventing sanctions. According to a recent report by the US Treasury Department, Russia is turning to alternative payment methods, including USDT, to escape sanctions.
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