Reports Suggest USDT Is Used In Venezuela To Facilitate Settlements And Avoid Sanctions –
Some companies in Venezuela use the stablecoin–tetherto avoid sanctions and process payments with foreign customers and providers. Local reports indicate that while the most popular use case for the stablecoin is buying to protect against devaluation, a handful of companies are also using it in this way.
Companies are reportedly using USDT to avoid being violated by sanctions in Venezuela
While the use of dollar-pegged stablecoins, like Tether’s USDT, in countries like Venezuela is primarily associated with inflation and devaluation, a second use case was recently discovered. Reports from local analysts say a handful of companies are using USDT as a payment method for foreign customers and vendors who are afraid to use traditional means of payment due to the risk of sanctions.
According to Juan Blanco, director of local consulting firm Bitdata Consultants, many unidentified companies transact trades with USDT, with some of that cash flow coming from companies in Asia and Russia. Blanco explained:
There are things that are produced in Venezuela that have great value and are traded in USDT. The little that is exported due to the blockade leaves the country through the free and independent mechanism set up by the Blockchain provided to pay for goods and services.
Luis Gonzalez, manager of Cashea, a local financing center, explained that sanctions hit Venezuelan SMEs even if they are not included in their scope. Gonzalez explained:
They restrict us with the sanctions that have nothing to do with political issues. Access to international transfers, currencies, means of payment and suppliers is restricted. Obviously, most payments are made abroad and in foreign currency. The only alternative we had is to use USDT.
crypto for oil
The reports on the possible introduction of cryptocurrencies to circumvent sanctions in Venezuela date back to 2019, when the country’s central bank prohibited the use of Ethereum and Bitcoin to pay suppliers to the state oil company PDVSA.
More recently, in October, the Justice Ministry indicted five Russian nationals and two oil brokers for using USDT as part of a scheme to buy equipment for the Russian military and sell Venezuelan oil. The indictment alleges that at least one sale of 500,000 million barrels of crude oil may have been transacted using USDT.
What do you think of the uses that Venezuelan companies have found for USDT? Tell us in the comment section below.
photo credit: Shutterstock, Pixabay, WikiCommons
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Source: Crypto News Deutsch
