Central Bank of Venezuela considers expansion of reserve with cryptocurrencies

Posted 27 September, 2019

The Central Bank of Venezuela has received a proposal to add the leading cryptocurrencies (Bitcoin and Ethereum) to its reserves. The bank is trying to determine whether this move makes sense.

According to the media reports, the initiative was launched by the national oil company Petroleos de Venezuela SA (PDVSA). In particular, the company highlighted that this option would enable the central bank to make payments to suppliers on behalf of the monopoly company using the cryptos in the reserve.

For reference, PDVSA faced serious challenges in cooperation with clients and suppliers after Washington imposed sanctions. The restrictions forced local banks not to deal with transactions connected with the company.

However, it is unclear whether the central bank has cryptocurrencies in its reserves. Still, the international reserve of the country is $7.9 billion which is the bottom over the past 30 years.

The market has analyzed the move of the oil company and believes that PDVSA probably can try to avoid direct deals with cryptos as it will have to register on exchanges, pass identification and legal compliance procedures. In this situation, they want the central bank to undertake payments to suppliers in cryptos.

For reference, Washington blocked real estate of the Venezuelan government in the US jurisdiction. The restrictions covered assets of the central bank and PDSVA.

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