Market News

Venezuela Turns to USDT for Oil Sales Amid Economic Challenges

The Venezuelan government is increasingly utilizing USDT for crude oil payments, marking a significant shift in its approach to international trade.

This strategy helps circumvent financial blockades and injects liquidity into the local foreign currency market.

Economist Asdrubal Oliveros noted that the adoption of USDT is growing within Venezuelan corporate treasuries, reflecting changing market dynamics.

He explained that this development allows the local government to receive funds in USDT and subsequently sell these stablecoins for services or local currency.

Reportedly, transactions are processed through state banks and only a select number of companies are authorized to manage these payments.

However, there has been no official confirmation or denial from governmental sources regarding these practices.

This trend sees PDVSA, the state oil company, requiring a significant portion of payments to be settled in stablecoins by 2024.

While USDT presents an alternative to traditional currencies, it also carries risks, particularly concerning Tether's potential to freeze assets if sanctions are applied.

This reliance on a centralized stablecoin raises concerns for the Venezuelan treasury and its business partners.

In July alone, it was estimated that over $119 million was introduced into the private sector through USDT transactions, indicating a noteworthy trend in the nation’s economic maneuvering.