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Last Updated : Sep 27, 2019 08:36 PM IST | Source: Moneycontrol.com

Amid US sanctions, Venezuela tinkers with using Bitcoin for international transactions: Report

The report noted as banks across the world are hesitant to transact with a country under such sanctions, the country is using various methods to carry out its transactions.

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The Central Bank of Venezuela is carrying out tests to see if it can hold cryptocurrencies in its reserves, as per a report by Bloomberg.

The report also noted that these tests are being carried out to see if it can safeguard its diminishing foreign reserves. They are currently at $7.9 billion, a three-decade low.

This is because the country is facing one of the worst economic crises in the world, and its financial system is isolated from the global markets following sanctions by the US.

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The report noted Venezuela is using various methods to carry out its transactions as banks across the world are hesitant to transact with a country under such sanctions.

Cryptocurrencies like Ethereum use an open-source platform that uses blockchain technology to run decentralized digital applications, or "dapps" to directly carry all transactions without brokers. These transactions are relatively anonymous.

Cryptocurrencies can only be sold by an entity on an exchange after being subject to scrutiny and due diligence. PDVSA believes that the central bank would not face as much resistance under this scrutiny, and requested it to sell cryptocurrencies on PDVSA's behalf for payments that the state-run oil companies owes.

The report doesn’t state how Venezuela came to own Bitcoin and Ethereum and what is the value of its holdings. It also noted that the country might  be planning to move away from the globally used SWIFT system and use a a Russian-operated international payments messaging system instead.

 

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First Published on Sep 27, 2019 08:29 pm
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