Venezuela’s state-run oil company PDVSA is adopting the Tether (USDT) cryptocurrency to continue its oil exports despite facing renewed US sanctions that threaten to freeze its foreign bank accounts. The move reflects a broader trend of integrating cryptocurrency into global trade as traditional financial channels become restricted. The urgency for PDVSA to adapt was underscored by the US Treasury’s decision not to renew a general license that facilitated previous oil transactions, setting a firm deadline of May 31 for the company to wind down operations under current terms.

This shift to cryptocurrency began intensively last year but has accelerated with the recent imposition of sanctions. By the end of the first quarter, PDVSA had transitioned many spot oil deals to require prepayment in USDT, and is now also imposing this requirement on new and some existing customers. While this strategy offers a workaround to sanctions, it introduces challenges, notably the skepticism within the oil trade regarding the use of USDT due to compliance concerns. Transactions in USDT often require intermediaries, potentially reducing the proceeds that PDVSA can capture directly. Moreover, the traceability and compliance stance of Tether with US regulations add layers of complexity and risk to this new transaction method.

Reuters