Venezuela’s state oil company, PDVSA, is set to increase its use of the stablecoin USDT for exporting crude oil and fuel oil due to tightened US sanctions. This development was reported by Reuters, citing sources.
According to these sources, the transition began last year, aiming to reduce the risk of the state company’s oil sales profits being frozen in foreign bank accounts.
The report indicates that by the end of the first quarter, PDVSA had already shifted many spot oil deals to a contract type requiring prepayment in US dollars. The Venezuelan oil company is also asking new clients interested in oil transactions to store cryptocurrency in a digital wallet.
Payments in USDT for oil are not regulated, so PDVSA and its trading partners rely on intermediaries, sources claim. This could potentially impact the company’s profits.
Since October 2023, the US authorities agreed to ease sanctions on Venezuela following a pre-election agreement between the local government and the opposition.
However, after President Nicolás Maduro barred an opposition candidate, the US Treasury required PDVSA’s clients and suppliers to wind down transactions by May 31.
Reuters reports that during the period of eased US sanctions, Venezuela exported nearly 700,000 barrels of oil per day, with 65% going to China and 19% to the US.
Earlier in 2024, the Venezuelan authorities abandoned further development of the national digital currency El Petro due to the project’s unpopularity. All coins were automatically converted into local bolivars.