Venezuela increases use of bitcoin to avoid US sanctions

11.12.2020

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Cryptocurrencies are becoming an increasingly important element of Venezuelan economic policy. The sanctioned country uses them to settle accounts with allies such as Iran and Turkey. 

This information was provided by the portal RunRun.es, citing sources from the Central Bank of Venezuela. The country ruled by Nicolás Maduro is to use bitcoins for payments in international trade with Turkey and Iran. It is not clear what goods or services were paid for in the cryptocurrencies, but according to Cointelegraph, it is known that both countries export food and fuel to Venezuela. So far, settlements have been made in gold.

Under the name of the Anti-Block Law, the Venezuelan authorities have introduced a number of laws to limit the impact of U.S. sanctions. The use of digital assets has become a key element of this strategy. Nicolás Maduro stressed that the new law will allow his country "to use all cryptocurrencies in the world - public, state or private, for internal and external trade". 

Another project undertaken by the Venezuelan government is to support farmers who can apply for loans and grants in the cryptocurrencies. As the Vice President of the Economy, Tareck El Aissami, described, it is not only Petro, but the whole basket of cryptoassets. This is yet another proof that, despite boisterous announcements, the Venezuelan digital currency has not met the adoption the authorities were hoping for. As a result, Venezuela has turned to bitcoin and other, non-state cryptoes.

Apart from releasing cryptocurrencies, the Venezuelan authorities are also involved in their extraction. Venezuela has created a national mining pool and a national exchange, enabling the purchase of digital assets for bolivars.

In addition to the actions of the authorities, the adoption of bitcoin in the country is also influenced by mass political and economic emigration. Many of the 4 million Venezuelan citizens who left the country use the cryptocurrencies to send funds to their families who stay abroad.

JacekSalach

11.12.2020 20:40

Accepted.