Venezuela’s state-owned oil company transitions to USDT to bypass US sanctions

Reuters revealed that the Venezuelan state-run oil & natural gas company PDVSA has decided to accelerate the use of stablecoins such as Tether (USDT) for transactions.

According to Reuters, Venezuela’s state-owned oil company PDVSA turned to USDT as the United States reimposed oil sanctions on Venezuela. In some contracts digital currencies might be the preferred payment. PDVSA also requires any new customers to hold cryptocurrencies. PDVSA was…

— Wu Blockchain (@WuBlockchain) April 23, 2024

That comes as the nation sees intensified sanctions from the United States.

The report indicated that the Biden administration would not consider easing oil sanctions on the country as Venezuela’s president, Nicolas Maduro, failed to satisfy his election pledges.

Consequently, the United States Treasury directed PDVSA providers and clients to suspend transactions by 31 May.

🇺🇸 𝗡𝗲𝘄𝘀 𝘀𝘁𝗼𝗿𝘆: The US administration today reimposed #sanctions targeting Venezuela's #oil #exports and #energy sector investments and set a deadline of 31 May for most foreign companies to wind down…

By Haik Gugarats and Kuganiga Kuganeswaran: https://t.co/cl88JrsEee pic.twitter.com/tgLvq98s3r

— Argus Media (@ArgusMedia) April 17, 2024

That would challenge Venezuela in bolstering its oil exports and output as it could only do business with US-authorized companies.

Meanwhile, PDVSA began channeling oil sales to USD-tied Tether (USDT) last year to ensure stability.

The latest remarks from the Biden administration are increasing this migration as Venezuela seeks to avoid risks of funds seizure in foreign banks.

PDVSA requires 50% of shipment paid in USDT

PDVSA introduced various adjustments to oil transactions in Q1 2024. The oil firm adopted a contractual model demanding 50% upfront for each shipment paid in stablecoin USDT.

Moreover, PDVSA requires new customers looking to do oil business to have digital coins.

Noteworthy, the company was under the radar in 2023 when auditors uncovered around $21B in mysterious receivables, with transactions linked to different cryptocurrencies.

Pedro Tellechea took over as Venezuelan oil minister following the scandal. His leadership has seen the nation’s oil exports soaring.

For instance, exports surged to 4-year peaks of approximately 900K barrels per day last month, boosted by US sales licenses.

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