In the past year, PDVSA has gradually shifted its oil sales to USDT, a stablecoin linked to the US dollar. This shift has been accelerated by the re-imposition of oil sanctions. In response to these harsh US sanctions, Venezuela’s state-run oil company, PDVSA, has taken further measures to diversify its revenue sources away from traditional fiat currency and towards digital assets like Tether (USDT).
The US Department of the Treasury recently requested that all PDVSA users and service providers halt all transactions until May 31st. Companies will need specific US authorizations to conduct business with Venezuela, making it more challenging for the country to increase its oil production and exports.
By utilizing USDT, PDVSA aims to reduce the risk of having its sale revenues frozen in foreign bank accounts due to these penalties. According to sources familiar with the matter, PDVSA’s adoption of digital currencies has been expedited by the return of oil sanctions.
Venezuela’s Minister of Oil, Pedro Tellechea, stated to Reuters last week that digital currencies are being considered as a preferred payment option for certain oil contracts. While cryptocurrency payments are gaining traction in some countries, the US dollar remains the standard for international oil trade.
Starting from the first quarter of 2024, PDVSA implemented a contractual framework requiring upfront payment of 50% of the value of each shipment in USDT for a significant number of spot oil contracts, excluding swaps. Additionally, PDVSA now requires all new clients to have a digital wallet for storing cryptocurrency in order to conduct oil transactions.
