According to local economist Asdrubal Oliveros, Venezuela collects 80% of its crude oil sales revenue in Tether’s USDT. The economist revealed the information in a recent podcast.
Oliveros said digital assets like USDT help sustain Venezuela’s oil economy, especially under United States sanctions. He further added that the country’s production of oil has risen to 1 million barrels per day.
The economist attributed the growth of oil production in Venezuela to the utilization of cryptocurrencies.
“The most direct link this year to the crypto sector comes from there because ultimately, almost 80% of oil revenue is being collected in cryptocurrencies, in stablecoins,” said Oliveros.
Caracas relies on stablecoins in its oil sector. However, the South American country struggles to liquidate its stablecoin holdings. This is due to controls limiting how the government can cash out and use the funds.
Oliveros added, “This is causing a bottleneck in the foreign exchange market, and that, well, puts pressure on demand, drives up the price, and that’s why we have to be very cautious.”
USDT is a big part of Venezuela’s oil trade
Local reports stated that USDT has become part of Venezuela’s oil trade. The South American country’s oil industry brings in $12 million. Most of this money is coming from China.
Integrating stablecoins like USDT in the oil industry is a huge move. It indicates that cryptocurrencies have grown and proved their usefulness in major industries. It also shows that stablecoins can be used to settle commodity trades when traditional payment systems fail.
Caracas has been receiving oil payments in USDT since 2024. The country resorted to crypto to evade US sanctions, which were imposed in 2019 under the Trump administration.
Full financial sanctions on PDVSA, the state-owned oil and natural gas company, and Venezuela’s central bank took effect at that time.
PDVSA started requiring digital wallets and USDT payments for spot oil sales by the end of March 2024. Caracas then authorized select banks and exchange houses to offer USDT to private companies for bolívars.
A bank or an exchange deposits stablecoins into a state-approved wallet before buyers can pay suppliers or sell them privately.
However, in 2024, Tether froze 41 USDT wallets connected to Venezuela oil sanction evasion. The wallets were linked to the OFAC’s specially designated nationals list.
In March, Washington imposed a 25% tariff on those buying Venezuelan oil.
Four months later, around 119 million worth of crypto was sold to Venezuelan private buyers, based on data from Reuters.
Oil shipments from Caracas rose to their third-highest average this year. However, tensions between the Washington and Caracas have been growing.
President Donald Trump ordered a naval blockade to prevent sanctioned oil tankers from entering or leaving Venezuela.
“For the theft of our Assets, and many other reasons, including Terrorism, Drug Smuggling, and Human Trafficking, the Venezuelan Regime has been designated a FOREIGN TERRORIST ORGANIZATION,” Trump wrote on Truth Social. “Therefore, today, I am ordering A TOTAL AND COMPLETE BLOCKADE OF ALL SANCTIONED OIL TANKERS going into, and out of, Venezuela.”
The Caracas government did not accept what it called Trump’s “grotesque threat.”
On December 10, the US seized an oil tanker off the coast of the South American country. Ten days later, the US seized a second oil tanker.
Despite the sanctions, the Venezuelan gross domestic product (GDP) grew from $102.38 billion in 2023 to $119.81 billion in 2024.
Prolonged sanctions may make the South American country a case study in stablecoin-based oil revenue.
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Source: https://www.cryptopolitan.com/venezuela-collects-80-oil-revenue-in-usdt/
