Venezuela plans to speed up USDT adoption following US sanctions: Reuters

Venezuela’s state-run oil firm PDVSA is gearing up to increase the use of the Tether stablecoin for exporting crude and fuel oil, as the U.S. has recently decided to reimpose sanctions on the country, Reuters reported Monday, citing sources familiar with the matter. 

Reuters reported last week that the Biden administration would not renew a license that eased oil sanctions on Venezuela after President Nicolas Maduro failed to measure up to his election promises. The U.S. Treasury gave PDVSA customers and providers to wind down transactions until May 31, according to a Reuters report.

PDVSA’s move towards USDT aims to minimize the risk of oil sale profits being frozen in overseas bank accounts due to U.S. sanctions, knowledgeable sources told Reuters. The company has reportedly been gradually shifting its oil sales to USDT since last year.  

By the end of the first quarter, PDVSA had already moved many non-swap spot oil deals to a kind of contract that requires prepayment in USDT, according to the report. The Venezuelan oil company is also asking new customers seeking to conduct oil transactions to hold crypto in a digital wallet.

As crypto transactions in oil do not comply with any trade compliance department, PDVSA and its trading partners rely on working with an intermediary, one trader told Reuters. This, however, may mean that the company would receive a lower profit margin, the report said.

In 2023, when the U.S. eased sanctions, Venezuela exported nearly 700,000 barrels of oil per day, 65% of which landed in China and 19% in the U.S., according to a January report.