In a bold move to circumvent impending U.S. oil sanctions, Venezuela’s state-run oil company, Petróleos de Venezuela S.A. (PDVSA), is increasingly turning to digital currencies, particularly Tether (USDT), for its crude and fuel exports. This strategic shift comes as the United States prepares to reimpose sanctions on the country due to a lack of electoral reforms, as reported by Reuters.
Sources familiar with the plan reveal that PDVSA’s primary objective is to minimize the risk of sale proceeds being frozen in foreign bank accounts as a result of U.S. measures.
Venezuelan oil minister Pedro Tellechea has acknowledged that various currencies, including digital currencies, may become the preferred payment method in certain contracts. This move highlights the growing importance of cryptocurrencies in international trade, especially for countries facing economic sanctions.
Transition For Cryptocurrency
The transition towards cryptocurrency has been a gradual process since last year, but the imminent return of oil sanctions has accelerated PDVSA’s efforts. The company is now requiring new customers to hold cryptocurrency in digital wallets, even for existing contracts that do not explicitly mention the use of USDT.
This requirement underscores the urgency with which PDVSA is seeking to protect its revenue streams from potential U.S. intervention. While this unorthodox approach to oil payments may help PDVSA evade sanctions, it comes at a cost.
Trading houses and former PDVSA customers have turned to intermediaries to fulfill the digital transaction requirements, which could result in a smaller portion of oil proceeds reaching the company’s coffers.
This reliance on middlemen may also increase the complexity and risks associated with these transactions, as the use of cryptocurrencies in international oil trade is still a relatively new and untested phenomenon.
Despite these challenges, Minister Tellechea remains confident in PDVSA’s trading capabilities and readiness to face the challenges posed by U.S. sanctions. He has emphasized the company’s “big strength in trading” and its readiness to address the return of U.S. sanctions.
However, oil analysts predict that Venezuela’s oil output, exports, and revenue will soon reach a ceiling, even if Washington promptly issues individual authorizations.
Not a Smooth Ride for PDVSA
As the Venezuelan state-owned oil company makes plans to circumvent U.S. sanctions, Tether—the issuer of USDT—has other plans. The company recently announced that it will freeze wallets using USDT to evade sanctions on Venezuelan oil exports. This decision follows the Reuters report and aligns with Tether’s commitment to adhering to the U.S. Treasury Department’s sanctions list.
In December, the firm froze 41 wallets tied to the U.S. Treasury Department’s Office of Foreign Assets Control’s (OFAC) Specially Designated Nationals (SDN) list. A Tether spokesperson told CoinDesk, “Tether respects the OFAC SDN list and is committed to working to ensure sanction addresses are frozen properly.”
Stablecoin Wallet Count Continues to Surge
In related news, the popularity of stablecoins continues to soar, with the number of addresses holding dollar and crypto-pegged stablecoins reaching an all-time high of 93.64 million. Tether (USDT) holders account for the majority of these addresses (76.3 million), followed by USDC (9.8 million) and BUSD (6 million).
The growing demand for stablecoins reflects investors’ desire for dollar-equivalents amid a rapidly changing financial landscape. In March alone, active stablecoin addresses rose past the 26 million mark for the first time on record, with nearly 20 million, or 77% of those addresses, based on TRON and Binance Smart Chain (BSC), largely representing retail investor participation.
USDT Statistics Data
USDT Current Price: $1
Market Cap: $110.5B
USDT 24-Hour Volume: $11.7B
USDT Circulating Supply: 110.4B
Total Supply: 112.9B
USDT Market Ranking: #3
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