Venezuela might not just be employing its own cryptocurrency to duck the outcomes of global sanctions. Media sources state that the nation’s central bank is trying the possibility of keeping its cryptocurrencies to assist Petroleos de Venezuela SA (the state-managed oil firm). The company supposedly has troves of ethereum and bitcoin, and shifting that cash to the central bank may avoid “potential bans” from traditional channels and allow let it pay suppliers that might come with either regular money or direct crypto payments.
The bank is similarly mulling over proposals to count cryptocurrencies toward global reserves that have fallen in late years.
It is not specific where Petroleos got the ethereum and bitcoin. There is also no assurance that firms might accept such a decision when relative anonymity of the crypto and the ability for money laundering results many other banks in holding off. That is not even adding the ability for additional trade limitations. This is a Hail Mary attempt to sustain the economy of Venezuela (and hence the government of Maduro), and it might eventually amount to a dangerous experiment even if it moves ahead.
On a related note, earlier New York accepted the first digital currencies that are connected to the US dollar, dubbed as “stablecoins.” These currencies evade the cost volatility of their brethren by being connected to stable cash. The currencies in question, from Paxos Trust Company and Gemini Trust Company, are accessible to trade on their individual exchanges. It is a good sign that cryptocurrency is growing.
The Winklevoss twins, who lifted to fame with a court case taking legal actions against Mark Zuckerberg for pinching the concept for Facebook from them, have turned out to be primary players in the cryptocurrency realm. They are responsible for Gemini Trust Company.