According to an investigative report by RunRun.es, Venezuela has redoubled its usage of Bitcoin in order to pay for the country’s imports, since it is currently under sanctions imposed by the United States. By doing so, the country is trying to bypass the sanctions that have been imposed by the world’s largest economy. An investigative journalist in Venezuela, Nelson Bocaranda founded RunRun.es. He cited sources within the central bank in Venezuela who had chosen to remain anonymous and claimed that Bitcoin was being used to pay companies from Iran and Turkey, countries that are allies of Venezuela. As of now, it remains unclear as to what has been imported from these regions.
However, it is not a secret that both Turkey and Iran provide the country with food and fuel in exchange for gold. The current president of Venezuela is Nicolas Maduro and the Petro cryptocurrency has been heavily promoted by his government. It is a state-developed cryptocurrency and it is claimed that Petro has the backing of oil reserves. Amusingly enough, this makes Petro the first central bank digital currency (CBDC) in the world, thereby beating China, which has made a great deal of progress in introducing a digital yuan in the country.
Petro had first been launched back in 2018 and it has been promoted as a means of exchange not just within the country, but outside it as well. However, things haven’t gone as planned for Petro because the digital asset has seen a very poor rate of adoption. Therefore, Venezuela’s regime was forced to adapt and look for other alternatives, which prompted them to explore the effectiveness of other cryptocurrencies, such as Bitcoin and Ethereum. The President himself has been actively supporting the use of cryptocurrencies for bypassing the US sanctions since September. Back then, Maduro had stated that his administration would use all the cryptocurrencies in the world, whether they are public, state, or private, for facilitating internal as well as external trade.
On October 8th, 2020, the Anti-Blockade Law had been passed by the National Assembly of the country. Under this new law, the administration was granted even higher executive powers in a move to bypass the sanctions that had been leveled against the countries. Of all these measures, the most notable one was the ability to authorize the use of cryptocurrencies and even their development to be used as a monetary instrument for making payments in the country.
One of the measures that were taken by the Venezuelan government included the founding of the ‘Digital Assets Production Center’. The government established this in November and it has turned out to be a Bitcoin mining warehouse. This makes it clear that Venezuela’s dependence on cryptocurrencies is increasing with each passing day. It was only last week when they had gone as far as launching the country’s own crypto exchange and the National Cryptoactive Superintendency provided backing for it. The purpose of the exchange is to enable citizens of the country to exchange Bolivars for BTC.