Venezuelan State Oil Company to Accelerate USDT Adoption for Settlements; Tether Vows to Uphold OFAC Sanctions – Bitcoin News

PDVSA, the state-owned Venezuelan oil company, would be preparing to migrate more of its payments portfolio to USDT, a dollar stablecoin, to avoid being affected by the restitution of U.S. sanctions. Reuters reported that the company started receiving payments in USDT last year and will accelerate its adoption. Tether, nonetheless, stated it will uphold OFAC sanctions when needed.

Venezuelan Oil Company PDVSA to Rely on USDT to Keep Ongoing Contracts

Venezuela is preparing to increase the reliance of one of its main industries on crypto and stablecoins payments. According to reports received by Reuters from three undetermined sources linked to PDVSA, the Venezuelan state-owned oil company, the government would be prepared to increase the amount of payments received in USDT, affected by the reinstation of unilateral U.S. sanctions against the country.

General License 44A, issued by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) on April 17, provides the framework for companies with contracts with PDVSA and other Venezuelan gas and oil companies to wind down their joint business. The license established that these operations must be completed before May 31.

Reuters states that since last year, the company has started using USDT, a dollar-pegged stablecoin with a market capitalization of over $100 billion, as part of its accepted payment currencies. However, the upcoming reinstation of sanctions by the U.S. government has accelerated this process, with PDVSA shifting to a contract model that now demands more than half of each shipment’s payment to be made using USDT.

In addition, PDVSA would require companies adopting this kind of contract to register into its internal database and offer proof that they have the cryptocurrency needed to complete the payments, according to another source.

These precautions could derive from the recently uncovered money laundering and embezzlement scheme involving crypto payments for unregistered oil shipments. The scheme involved several former high-level members of the Venezuelan government, including former oil minister Tareck El Aissami and Joselit Ramirez, former head of the Venezuelan cryptocurrency watchdog Sunacrip, both currently arrested.

While there is still no information on the amount of money embezzled and then laundered using crypto as a tool, earlier reports indicate that at least $20 billion was subtracted from the public treasury.

The alleged usage of USDT to sidestep U.S. sanctions has stirred the cryptocurrency community for its implied consequences. However, Tether vowed to uphold U.S. sanctions when required.

A spokesperson from Tether stated:

Tether respects the OFAC SDN list and is committed to working to ensure sanction addresses are frozen promptly.

This, however, might be difficult, as experts signal that the use of USDT for these payments might imply the intervention of intermediaries outside the traditional organizational structure of oil companies. A trader told Reuters that these transactions “don’t pass any trader’s compliance department, so the only way it works is to work with a broker.”

What do you think about Venezuela using USDT to settle oil payments? Tell us in the comments section below.

Source: Bitcoin

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