Venezuelan Central Bank Considers Stockpiling Bitcoin & Ethereum

Anonymous sources close to the Venezuelan Central Bank told Bloomberg that the financial institution not only seeks to hold cryptocurrencies but to accept them as well from the national oil production company PDVSA. As Maduro’s national cryptocurrency project failed to some degree, it seems that the adoption of established digital assets may bring better results.

Venezuelan central bank

According to a Bloomberg report published on 26 September, the Venezuelan Central Bank has plans to hold cryptocurrencies. The news agency cites four people who are close to the institution, claiming that the Venezuelan Central Bank is researching whether it can hold digital assets such as cryptocurrencies.

Bloomberg states that the Petroleos de Venezuela, SA (PDVSA) seeks to send Bitcoin and Ethereum to the Central Bank. The PDVSA is a state-owned oil and natural gas company, which is one of the main contributors to the Venezuelan economy. The financial institution is also researching if their monetary policy allows cryptocurrencies to be counted toward international reserves, which hit a 30-year low at $7.9 billion.

Crypto as a saving grace to circumvent US sanctions

Aside from the Venezuelan Central Bank, other nations that are under U.S. sanctions decided to use cryptocurrencies as a gateway toward the global financial world.

For example, cryptocurrencies in Cuba have recently become popular in the island-country as their citizens do not have access to international payment systems such as Visa or Mastercard. To send money globally, Cubans use cryptocurrencies such as Bitcoin.

Other nations such as Iran and North Korea also adopted cryptocurrencies to circumnavigate financial sanctions.

However, the story with Venezuela is unique as the nation is facing total economic collapse. Having one of the worst cases of hyperinflation in recent history, most residents use cryptocurrencies such as Bitcoin as a store of value asset. Hit by U.S. sanctions and being unable to sell their oil, Venezuela has thus adopted Bitcoin and went as far as to create a national cryptocurrency named ‘Petrodollar.’

With the project remaining largely unsuccessful, the information that Bloomberg revealed indicates that the PDVSA holds reserves of cryptocurrencies. How it acquired the digital assets is still unknown. However, some hold the view that international customers, unable to pay in fiat money due to U.S. sanctions, must have resorted to paying the PDVSA in crypto.

When press officials inquired both the PDVSA and Venezuelan Central Bank for a confirmation, both entities did not reply to the request. We are therefore yet to see if they will officially adopt cryptocurrencies for private-channel payments.

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