The central bank of Venezuela is reportedly conducting internal tests to see if it can include major cryptocurrencies, especially Bitcoin (BTC) and Ether (ETH) in its reserves, Bloomberg reported Thursday.
According to four people familiar with the matter, the development is coming as a request from the state-run Oil and Natural Gas company, Petroleos de Venezuela SA (PDVSA). The oil company is seeking to pay quickly with cryptocurrencies ; hence, it wants the country’s monetary authority to adopt the model to enable them to pay PDVSA’s suppliers with either Bitcoin or Ether.
“Staffers are also studying proposals that would allow cryptocurrencies to be counted toward international reserves, now near a three-decade low at $7.9 billion,” the report reads.
During the regime of Nicolas Maduro, the former president of Venezuela, the U.S. placed a sanction that isolated the country from the global financial system, which increased one of the world’s most critical economic crises.
The sanction made officials deploy a patchwork of methods in an effort to move money across countries. Major banks on this note failed to do business with the PDVSA, causing the company to struggled with conventional channels in order to get paid by its clients.
As per the report, the company had to receive most of a $700 million payment from its client in Chinese yuan in August, after several attempts by both entities to find financial institutions to facilitate the transaction proved abortive.
Following these struggles, it remains unclear how PDVSA manage to acquire BTC and ETH, and the actual value of the cryptocurrencies they hold. However, since the company needs to register with an exchange to sell their digital assets on the open market, it may delay in selling them off.
Based on the fact that the country’s central bank is less exposed to potential blocks, the company instead wants the bank to use cryptocurrencies to pay off entities they own money.
Notably, the properties of cryptocurrencies make them the ideal method for a smooth transfer of money across several countries, since they use blockchain to verify and record transactions. This led to the creation of the Venezuela “Petro” oil-backed cryptocurrency in February .
In August, a Venezuelan pharmacy franchise, Farmarket partnered with a payment processor, Xpay to encourage the general adoption of Dash coin as a payment option in the country, Coinfomania reported.