Venezuela: Government Uses Bitcoin to Pay Iranian and Turkish Companies

The president of Venezuela Nicolas Maduro had presented in September a new anti-sanction law, which was based on cryptomoney.

And it seems that he wants to continue this initiative. Bitcoin was used for cross-border payments between Venezuela and allied countries.
Venezuela: government uses Bitcoin Era to pay Iranian and Turkish companies

Venezuela Settles Cross-Border Bitcoin Transactions

According to the Spanish media Runrun, Nicolas Maduro confirmed his attraction to digital currencies, explaining that he could „use all the world’s crypto-currencies, public, state or private, for internal and external trade. „As a reminder, the Venezuelan government had already tried to push for the use of Petro (PTR), its state cryptomony. But it had been forced to turn to more solidly established cryptomoney to support Venezuela’s economy, including Bitcoin (BTC).

And the machine was already up and running, according to sources close to the country’s Central Bank. Payments to companies in countries allied to Venezuela, such as Iran and Turkey, have already been made thanks to Bitcoin. This new means of payment has been used in the framework of the Anti-Sanction Law, which gives the Executive the power to authorize „the creation and implementation of any financial mechanism“.

That the government is now frankly turning to cryptomoney is not entirely a surprise. It had already proposed a state mining pool in order to be able to monitor Bitcoin miners and cryptomoney shops located in Venezuela. On the other hand, a month ago we learned of the creation of a state exchange for Petro, Bitcoin, Litecoin (LTC) and Dash (DASH). The latter opened its services last week.

What about the exchange of cryptomoney for the country’s fiat currency, the sovereign bolivar (VES)? According to Runrun, Coindance data shows that the number of bitcoins exchanged each week on LocalBitcoins has decreased. But this is partly due to two aspects: on the one hand the rise in the price of the BTC, and on the other hand the dizzying drop in the price of the VES.

Still, this is the first time a government has relied so heavily on cryptomoney. Will this allow Venezuela to support an economy that is still severely strangled by US sanctions? That remains to be seen.