After creating its own digital currency to help the country avoid US sanctions, Venezuela is now planning to hold Bitcoin reserves with its central bank. The state-backed oil company Petroleos de Venezuela SA will reportedly transfer its cryptocurrency reserves to the central bank in order to avoid sanctions and overview from the international community.
Bloomberg Tipsters Inform of the Change
In a recent post, Bloomberg wrote on behalf of its tipsters that the central bank could be holding cryptocurrency reserves of the country’s state-backed oil firm. Venezuela has one of the largest crude oil reserves in the world, but it is suffering from numerous sanctions, especially those levied by the USA. Previously, the government tried to evade sanctions by launching their own cryptocurrency called Petro. Each Petro coin is backed by one barrel of oil.
The country’s tryst with digital coins is going to the next level as it tries to transfer the Bitcoin and Ethereum reserves of Petroleos de Venezuela. This could help the company avoid “blocks” with conventional channels. It can now pay suppliers more easily, avoiding conflict arising out of direct cryptocurrency payments. The central bank may even go on to count the digital currency focused on international reserves.
What’s the Impact of This Exercise?
Petroleos has Bitcoin and Ethereum reserves, but the exact amount of this holding is unknown. It could be worth millions or even billions. It is also uncertain how exactly the company piled up its crypto resources.
The Venezuelan central bank is making a bold move as most of its peers are trying to maintain a distance when it comes to cryptocurrencies. The anonymous nature of digital coins and the rampant criminal activity in this sector leads to several risks- like money laundering and terrorism financing. Some banks are considering the launch of state-backed digital coins, but such programs are only in their infancy.