Venezuela’s central bank is working on some internal tests as they plan to test and try whether they can hold cryptocurrencies. The efforts come from the state-run Petroleos de Venezuela SA, which is planning to send Bitcoin and Ethereum to the central banks and have the monetary authority pay the suppliers of the oil company with the tokens.
The U.S. sanctioned Nicolas Maduro’s authoritarian behavior as this has primarily isolated Venezuela from the financial system. These restrictions have started one of the most severe economic crises, and the officials have been using patchwork to move the money around.
Maduro’s plan of bringing the first sovereign crypto failed big time, and the continuous efforts to use cryptocurrencies shows how desperate the government is to find an alternate way to save themselves from the restrictions.
There are still no answers for how PDVSA got their hands on Bitcoin and Ethereum tokens and the oil producer is struggling to get paid via conventional channels as banks are hesitant to do business in such way. Last month’s payment was received in the form of $700 million in Chinese yuan as the parties struggled to find a way in which the transactions would facilitate.
PDVSA is not ready to sell their cryptocurrencies on the exchanges as it would require them to register on an exchange which would make them open to checking by government regulators. Instead, they wish for a central bank to help them pay the money to the entities that they owe money to as they believe central banks are less exposed.
BTC and ETH use online ledgers that are identified as blockchain to verify and record transactions. Very few banks now are involved in dealing with cryptocurrencies because of the KYC and money laundering issues that cause compliance problems. With Facebook’s plan of launching a coin, cryptocurrencies have made a comeback this year as compared to 2018.
Venezuela has been working on the possibility of switching to a Russian-operated international payments messaging system to shield itself from the effects of future sanctions.