Well, well… The truth has come out. Despite Venezuela pushing for Petro adoption and allegedly threatening cryptocurrency miners, the country seems to have its own private stash of both bitcoin and Ethereum – and it has no idea what to do with it.
Venezuela and Crypto: A Strange Mix
Venezuela has had a strange relationship with cryptocurrency. The country initially began pushing for widespread use of the Petro beginning in February 2018. The currency is allegedly backed by the country’s many oil reserves, yet there appears to be no mention of this in the currency’s whitepaper.
Even worse is the fact that the currency has failed to catch on. President Nicolas Maduro initiated a new work-based program that would allow employees in Venezuela to be paid in Petro units rather than the nation’s national fiat currency the bolivar, which has been suffering from inflation for some time and has ultimately fallen flat on its face in terms of value.
This work program didn’t make much of a dent in Venezuela’s way of life, and the initial coin offering (ICO) that birthed the Petro in early 2018 also doesn’t seem to have made many waves, despite Maduro’s insistence that the country sold almost a billion dollars-worth of Petro units.
The currency has become so controversial that U.S. President Donald Trump has banned all Petro trading within the United States.
It has been reported, in the past, that Venezuela has sought to stamp out all users of other cryptocurrencies to potentially boost the Petro presence within the country, so it’s a shock to see that the nation has been stocking up all this time. The nation’s central bank is now looking into whether these currencies can potentially be stored in Venezuela’s coffers.
Four anonymous sources say that the money is being sent by the country’s primary oil and gas company, and that the crypto funds would be used to pay its many suppliers. At press time, it’s not known how the company came to own these currencies, nor is it known how much money is in question. It appears the enterprise is looking to settle the matter privately without registering through a crypto exchange.
How Can We Use This Money?
It also appears the bank is seeking to prepare a cryptocurrency-based plan that would allow digital currencies to be put towards international reserves. At the time of writing, Venezuela is running a little low on these reserves, having less than $8 billion stored away following a gold sale in May of 2019.
One thing is for sure: Venezuela is suffering, partly because of the arguably necessary sanctions being imposed by the U.S. The idea that it’s consistently resorting to crypto falls in line with countries like Iran and Russia, which in the past, have looked to crypto to surpass similar sanctions initiated by America’s government.