Topic: [2019-09-27] Hyperinflation Forces Venezuelan Central Bank to Explore Bitcoin (Read 384 times)

You don't need to sell them any coins. They can easily purchase coins from the numerous exchanges around the globe. As far as I know, there are no sanctions which bar the purchase of BTC by the Venezuelan government. But the big question is whether they can afford the purchase or not. How can a regime that can't afford toilet paper afford cryptocurrency? As I said earlier, they are likely to use Bitcoin for the purpose of using it to circumvent the sanctions, or to do something illegal (I have heard that some of the Venezuelan government officials are involved in the smuggling of cocaine from Venezuela to Belize).

Hihi, no, ...well not really..
A few years ago (a decade or so) we did buy a few tones of illegal gasoline from some truckers for our farm, but that's all  .


Yeah,102%,  because you know how it is, you have to be careful when you choose your friends, better than your enemies.
When your allies Russia and Iran sell oil, and they are interested in the oil price being high, the might be a possibility of them not really wanting you to get better and clog the market with another 1.5m barrel a day, right? The same with Iran, who benefits the most if the production ann export is not maxed again? The US..or Russia? 

That's why politics are such a pain in the ass
So, let's stick to bitcoin and leave them for that mess of what P&S has become.


This is not media
https://www.cia.gov/library/publications/the-world-factbook/rankorder/2246rank.html


So...I see something a bit wrong with one of them, at least.

Anyhow, getting off-topic here, let's go back to the subject.
Let them buy Bitcoin!!!! I won't sell them a coin! 

25,000 barrels a day at present market prices would be $1.5 million per day or $45 million per month. For the Venezuelan regime this may be a significant amount. That said, I don't really think that this 25K figure is very accurate. Data is very difficult to obtain from the DPRK government, and most of the media sources make assumptions regarding the economy and commodity consumption. In reality, for a country with a population close to 25 million the daily consumption may be much more than 25,000 barrels of crude.


Bribing the Chinese border officials is a possibility. But recently when the Russian companies tried to smuggle crude oil in to the DPRK, the Americans were able to find that out with the help of satellite imagery. The companies mentioned here were sanctioned and blacklisted. As I said earlier, it is not very easy to smuggle something this big in to the DPRK. The American spy satellites are very efficient in tracking the movement of goods in and out of North Korea.

Yes it possible solution bitcoin is the alternative solution of the financial crisis of every nation in the world if tgey no the capability of new digital virtual crypto currency to help for the economic growth, the way to give better income of the people and better job using this kind of investment.

ha! you've been a goldmine of information, are you sure you're not actually a black market oil dealer or something



hmmm, yet again these are very good points, I am convinced

so it seems like Maduro is a little screwed....

although, it's interesting that you say Nigeria and Algeria are still trading light crude (apparently) openly with Venezuela, kind of disproves my theory that only the most sanctioned nations can trade with Maduro, Who's backing Nigeria and Algeria militarily, China? All that talk of a proxy war across Africa is more convincing if so, Xi is practically tickling Trumps boots!

Hihi, I love this route smuggling planning....

Let's say they find a way, let's say they deal with bitcoin, everything will be untraced, Venezuela will sell oil to NK, it will receive bitcoin, with the money flowing the crisis will be gone...
Don't you have a feeling of missing something very important?

When Venezuela was doing alright prices were at 100$ and they were producing 2.2 million barrels of oil.
Now prices are 50$ and they produce 800k.
But of course, they could raise production and sell the extra to NK.....oh ..wait..
NK has a consumption of 25 000 yeah 25k barrels of oil a day, 1% of the former oil production of Venezuela.  

Details, details...reminds me how the enthusiastic Russian agriculture minister was trying to impress Putin with his plan of exporting pork to a Muslim country.

how do you know that's the reality though? i.e. "can't"



only if they get caught



Iran apparently made some pretty smart maneuvers to evade the sanctions, I don't think they necessarily were allowed to do it, although, who knows?



If North Korea can make "any amount" of payments to the Venezuelan regime, they can do the same to Chinese/South Korean border officials, or to captains of US warships. If I was Kim Jong Un, I'd have spies looking for US warship captains in Okinawa all the time, trying to get on their good side

North Korea is under UN sanctions and embargoes. Venezuela, or any other country can't sell crude oil or petroleum products to the DPRK. If they attempt to do that, then the tanker ships will be seized by the United States and the cargo confiscated. Going through the Panama Canal won't make things any less difficult. Iran was allowed to get away, as their sanctions are not this tough.

The point is, North Korea can make any amount of payments to the Venezuelan regime. But in return, they will not get any physical assets. The embargoes are being enforced very strictly, and any sort of smuggling in to the DPRK is down to bare minimum levels. It may still be possible to transport very small commodities such as gold bars though the Chinese border, but don't expect large containers or tankers to pass through.

North Korea is a stupid country with a stupid autocrat. Even if they do that doesn't makes situation of Venezuela hardly better.Well this sounds something new. Never heard that government of North Korea themselves are behind stealing bitcoins. Stealing from Upbit in South Korea seems like revenge of an old-border sharing rivalry.    But your point is correct it's definitely difficult to transport Oil via the Mediterranean. However what if Venezuela tries to transport it other way around the Globe through the Panama Canal. Even though a bit more costly but it could save them from a lot of political hazzles.

You don't need to dig deep to find what is causing economic collapse in Venezuela, despite the huge petroleum deposits. First of all, they should stop the stupid gasoline subsidy. It is just killing the economy. If the government wants to give subsidy to the poor, then this subsidy must be paid out in fiat cash and not in gasoline. I will explain why gasoline subsidy is such a foolish step.

Recently they introduced rationing for gasoline. But even after this, gasoline in Venezuela costs less than distilled water. However, in neighboring Colombia, the gasoline prices are closer to the global prices. So obviously the impoverished Venezuelans sell their subsidized gasoline to Colombian residents, at very low prices. As a result, the ordinary Venezuelans earn a very small profit.. and the Venezuelan government suffers a huge loss.

No, they don't have any stocks left, they are importing light crude from Nigeria and Algeria.
Second, there are no oil companies , it's just PDVSA a state monopoly created by the nationalization in the '70 and as a state-controlled company...guess how many reserves it has.


Reserves mean nothing if you can't turn them into money.
Russia is by its reserves in oil, gas, minerals and almost everything the richest country in the world, by GDP per capita, they have been surpassed by Romania...and no offense to our Romanian colleagues....but..
Second, they are in reserves, in actual production and impact on the market they have started to become negligible, their production was cut from 2mils to even 800k a day, that is below the UK and somewhere on place 23 or 24th in the world.

Bottom line, some bitcoin won't save them, there is so much more work to be done than simply stashing coins away.
Oh, and neither is oil.

The odds of any official government entity embracing Venezuela is essentially zero for their domestic use.  Maduro and his ilk (the Chavez disciples) have no desire to lose control of their money supply.  Regardless of what they have said about helping the little guy, they have only cared about their own power and the riches it brings.  It has been demonstrated repeatedly that while they want to equalize income, these policies only equalize suffering with the degree of suffering being proportional to the degree to which their policies are implemented.  Venezuela has gone full socialist and has reaped the consequences of doing so - going from the richest country in South America to the poorest in just a few decades.  It should be a lesson to socialists everywhere, but they see that those in power succeeded in enriching themselves for a decade or two and so are willing to give it a try by promising "free" stuff to people to get their votes, e.g. an advanced auction on stolen goods.

Venezuela could use it for trade in order to avoid international payments networks so as to avoid having to attempt to smuggle $5 million in gold into the US like was reported they did last week.  (https://www.miamiherald.com/news/local/article235417622.html).

Individuals would be smart to buy some insurance against authoritarians (socialists, fascists, totalitarians, communists) with a bitcoin or two in case it is ever needed.

Their situation is very different compared to small countries going big in crypto like what Malta is trying to do. In Venezuela's situation their economy is in the drain and the money they have left from their central bank and presumably the funds they have collected from their Petro coin is the only thing standing between it and having an even more worst position compared to before. They are not only battling the risk but also the hyperinflation that stands on their way even if they have doubled or tripled their ROI in a short time frame I don't think that would be enough to solve their problem with the economy. We are talking about an inflation rate that is expected to reach 10,000,000% by the end of 2019 and risking what they have on crypto isn't really the best solution out there.

North Korea may be able to make payments in Bitcoin (or some other cryptocurrency) to the Venezuelan government. From what I have heard, the North Korean hackers managed to steal a lot of coins from some of the Asian exchanges recently (one example is UpBit of South Korea) and the fat boy Kim has plenty of coins in his wallet as a result of all these heists.

But now comes the issue. How Venezuela can transport crude oil half way across the globe? Iran tried to circumvent the sanctions and sent crude to the Mediterranean. It didn't end well and the Iranian tanker ship Grace 1 was seized by the Brits (it was released only recently).  Unfortunately for the Venezuelans and Kim, crude oil is not a digital asset like Bitcoin.  

My apologies for my combative reaction. I should have phrased it differently.

I still don't see how that's funny, because all you are doing is follow the general permabull narrative where there simply isn't anything of use in other platforms.

I'm not particularly a fan of Vitalik (far from it actually), but there are some amazing developments happening on top of Ethereum when it comes to DEFI. My personal favorite is DAI, a decentralized stablecoin that self regulates its peg to the US Dollar. Amidst the shitload of centralized stablecoins we have in this space, it's refreshing that a problem is actually solved here, or at least, attempted to.

aha, you are correct


this explains alot then. As Venzuela need light crude to process their own (and suddenly I'm remembering; US oil companies processed alot of Venezuelan crude up until the sanctions), it makes it really easy to pressurize Venezuela, as in order to process their own heavy oil at home, they need to import light oil from elsewhere.

Which is a mysterious... presumably the Venezuelan oil companies have stocks of pre-refined oil from before the sanctions, as prices are still heavily subsidized there? Or maybe they're sneakily continuing to get light oil from somewhere...



Well one thing I am pretty confident about: Venezuela are in the top 5 countries for amount of oil in their oilfields. Although the veracity of the reserves isn't easy to totally prove, as the respective countries don't really want anyone to know exactly how much they have.

If you think about it, the risk is negligible from where they are right now. If they went for Bitcoin a long time ago, they wouldn't have lost thousands of percents in purchasing power, but just a 50-60% if they bought at the very peak.

Obviously, the dollar or gold would have held their value better in the short term, but they are in need of an alternative that can't be censored and is easy to move, which is Bitcoin.

I however wouldn't want to see them use Bitcoin because all it does is point unwanted attention from opposing governments to Bitcoin. Let them use Ethereum or some other wonky smart contract platform.

It's too late for them now, even before this happened they have already accepted other fiat currencies in their country as a mode of payment but even that didn't stopped inflation in their country. Exploring on high risk high reward asset such as Bitcoin would be like a double-edged sword for then if they don't know how to trade it properly. But I'm still giving them the chance that they can still do something because if the current price level we are in, if they trade properly they might somehow earn something from it but it cannot really stop the hyperinflation they are experiencing.

Exactly the opposite!
Venezuela has heavy sour high in sulfur oil which needs sweet to dilute and also needs special refineries for this, neither Iran nor North Korea has them, outside the US only India and China would have some but are already full with their own traditional purchased oil from either Centra Africa or Kuwait.

So no, Iran will have no use for that oil other than pass it out to the next customer to avoid.....lols...


900k barrels a day, 50$ for a barrel , that makes roughly 16 billion a year ...which is nothing.
For comparison, the country closest in population from the EU, has a GDP of 600 billion.


Failed country, moronics leader, game over...insert new shitcoin to continue. 
Yeah, I find it funny too  ;

@Carlton Banks. It was not a bait. I did laugh.

@1Referee. I should have highlighted the whole statement on the article.

The Central Bank of Venezuela is exploring whether to hold Bitcoin and Ethereum in its international reserves.

The assumption that they are exploring Ethereum to be held in their international reserves is already very funny. They might not have done the proper research hehehe.

However, if you think Ethereum is a success, it will not be funny. But, following Vitalik and listening to him pivot from a direction to another direction, I reckon Ethereum might not achieve what it was created to do.

ok, was only trying to help actually!

Mr Carlton, the elite poster. If he considers someone not worth talking to, then oh well, no one should. Right? The way you refer to bbc.reporter is ridiculous to say the least.

I am genuinely interested in his side of the story. If you aren't interested, which is all fine, then just don't get anything started.

it was bait to get you into a dialogue. very few people actually talk to the user you're replying to, because, well... I'll let you figure it out

you're being baited because the user needs people to talk to it, because, well...

I don't see why that's so funny?

They might own Eth for the purpose of moving USDT and some other stablecoins back and forth, which you need to pay for gas. Another aspect is that they might tokenize their fiat currency and have it run on Ethereum. If you also take into consideration that Ethereum will very likely switch to POS eventually, that will make them a powerhouse if they hold a lot of coins.

Don't forget that not everyone is a Bitcoin purist. It might be hard for Bitcoin bulls to believe, but there are a bunch with great interest in altcoins too.

not even North Korea? It's under harsher sanctions than anyone else, and for longer

No country would trade in BTC with Maduro for Venezuelan Oil I repeat No country. Let me explain why, The top export countries for Venezuela have been USA, China, India and a bunch of European Countries and all of these countries are kind of the solid Economy Structures of the world and all of them have been strictly against cryptocurrencies. So no way that these are going to trade in BTC. Now not only these countries are major exporters they are also pretty much involved in the politics of this country too. Now if they think Venezuela is trading BTC for Oil with a few countries they will take it pretty seriously.

I think buying bitcoin is just a step to assure other countries that Venezuela has enough funds to pay off their suppliers and pay for services of extraction because looking at their current situation no country would have even trusted them with an order of crude oil.

all of that is wrong


the Venezuelan currency has been getting massacred on the foreign exchange markets for many years, and arguably for no good reason seeing as Venezuela is huge in the oil business. Chavez and Maduro certainly did print money to keep powerful Venezuelans on their side, all governments do that. But I am pretty skeptical that powerful Venezuelans are even accepting bolivars as payment these days, and even if they did, Maduro cannot risk pissing them off at all right now.

So even if 100 trillion bolivar notes are being printed, it's not the cause of the hyperinflation, it is an after-effect.

I don't know how Bitcoin is going to help them. Maduro is very well aware of what is causing hyperinflation in his country. If he slows down the printing of banknotes, then the inflation rate will come down. But he is not willing to do that, because he needs to pay the military and the government officials who remain loyal to him. Now what difference Bitcoin is going to make here?

Although cryptos can help individuals in Venezuela in their daily transactions and protect them for hyperinflation, they can't help the country as a whole. BTC isn't a cure for socialism ! They need some serious political change first.   

It would be interesting of a study in case Venezuela would eventually adopt Bitcoin as part of its national reserve of currencies and how it can impact the country's economic woes and challenges. Well, for a country that is desperate exploring as many options as possible is imperative. Will Bitcoin be a catalyst for good change sin the economy of Venezuela or will it just be a status quo? Now, if there will be positive domino effects in the use of Bitcoin then certainly this can not be hidden to other countries that can have economic and political upheavals as well. But at the same time this can cement the notion that Bitcoin can be a good way to avoid sanctions.

It's like the perfect solution for them. Due to their government's actions and corruption, all the people at the top are super rich, and then the normal people are bankrupt, and defaulting on all their loans and mortgages. Such a horrible situation...

I don't think they can see BTC as a long term option though, more of just a bandaid fix until the economy gets fixed up a little bit - BTC will be extremely volatile and to have that as your main currency, means that you will have huge, huge swings that aren't healthy for anyone.

I'd like to see how they deal with this though. How is BTC going to be used here?

I very much highly doubt that any government will openly embrace a technology whose foundation is based on decentralisation.

Let alone the Venezuelan government which has had a track record of economic mismanagement, as well as being a direct competitor to bitcoin essentially with their Petro project (which has gone to crap). What incentive is there for them to "help" the Venezuelan people? Close to none, really.

I believe that the most likely outcome is that they will continue to be essentially pushing Petro adoption, more than anything (or perhaps a revaluation of their currency?) which is no different from their current fiat.

Cryptocurrency has proven to be a good option against hyperinflation, especially in Venezuela case, due to US government and international trade sanctions.
Venezuela gov have some way to stockpiling cryptocurrencies via the collection of taxes in cryptocurrency, sell Petro in exchange for bitcoin and litecoin, people can buy airline tickets and amenities using cryptocurrencies and the Petro such as for Passport, licenses, fines, plates, and titles.
They simply use bitcoin, ethereum, BNB, and litecoin to circumventing financial blockades to selling energy resources.
on the one hand, it is a good use of cryptocurrency, on the other hand, it is quite sad for them to struggle through all these schemes because of the Maduro's regime.

I read a similar article. However, when I read it, this article made me a little, quiet laugh that I could not control.

I hope that it is true hehehe. Let them hold it.



The Central Bank of Venezuela is exploring whether to hold Bitcoin and Ethereum in its international reserves. The cryptocurrencies would be used to circumvent international sanctions and pay state-run oil company debts, the report revealed.

Source https://cryptoslate.com/venezuela-could-hold-btc-and-eth-in-its-international-reserves/

that's unlikely to happen, not least because it's actually really difficult for Maduro to rip Venzuelans off too badly right now due to all the external pressure Venezuela is exposed to



well, those things all sound positive to me.

• Regular Venezuelans are protecting their wealth independently using BTC
• Venezuelan gov realizing they can take a tip from their peasantry citizenry and using BTC to stop themself getting bullied on the world stage
• Zimbabwean people using fiat money not controlled by Zimbabwe gov
• Zimbabwean people using cryptographic money not controlled by Zimbabwe gov
• Zimbabwe gov weakened by the above
• Venezuelan gov weakened by the above

I hope the state collapses in both countries (it nearly already has, yet as if by magic, life literally goes on).

So long as people are smart enough to find a way to keep the army and the police in place (i.e. pay honest, smart people to do the job a smart way), then the trading environment in either state could be incredible, they could become world renowned for entrepreneurial innovation. I think Venezuela in particular would need that army though, although I suspect the people running the Venezuelan oil business are already pretty close to the army anyway.

The Venezuelan government should rather concentrate on changing their political goals and start serving their citizens and not enriching themselves at the cost of their citizens.    Their own people are shifting away from their local reserve currency, because it is working against them and they are moving their wealth into Crypto currencies like Bitcoin to protect it's value.

Simply using Crypto currencies to bypass economic sanctions are not going to solve their problems. Zimbabwe started using different currencies from other nations and they are still struggling, because their government is corrupt. 

Maduro's Venezuela can only solve it's problems using BTC as a trading currency in a limited fashion, at least in the short-term

Most of the countries they can still trade with (which is already a short list) don't want to encourage a BTC based world, as that undermines their power as controllers of their own regional currency.

Because Maduro is in a desperate position, he can only trade with similarly desperate nations. To my mind, there are only 2 such nations: Iran and North Korea.


Iran possibly doesn't need Venezuelan oil, or maybe not much. Venezuela has sweet light crude to sell, and it's possible Iran doesn't need much (not 100% on this point, but certainly heavy crude requires some light crude as part of the refining process, exactly what Iran needs I am not sure of)

North Korea, however, are in an equally crappy position, perhaps worse. And the rumors are that North Korea uses alot of gangster-ish unofficial back channels to continue to trade (through China, South Korea and Japan). But it's a big ask: get Venezuelan crude all the way across the Pacific, to or near to North Korea without getting intercepted by Team America: World Police.

If, however, Maduro could pull something like this off, it's possible that the long-term might look after itself.


Which other countries are so embattled on the world stage that they'd actually trade in BTC with Maduro for high quality Venezuelan oil? Any ideas?

They are getting desperate and when the banking system start looking towards other opinions, you know things are bad in these countries.
The government are rich yet the people are poor thus defaulting on their loans to them. So they have to go to plan b which in this case is the big B called BTC!

Way to go on becoming the go to currency on gettting Venezuela out of the economical crisis they are in!

When it comes to cryptocurrencies, no stone should be left unturned. That applies to both individuals and entire nations alike. Venezuela, a country known for its rather hostile approach to Bitcoin, might be on the brink of openly embracing the world’s leading cryptocurrency. The national central bank is conducting surveys to see if Bitcoin can become part of its foreign reserves.

Venezuela’s Situation is Dire

Most people are all too aware of the problematic financial situation hampering Venezuela for several years now. The country no longer just suffers from regular inflation, but has to contend with hyperinflation every so often. It puts a lot of strain on the economy, and there has not been a viable solution in sight. Contrary to what everyone had expected, Bitcoin might effectively become the saving grace of this country after all.

After attempting to remedy the dire situation for some time, the Venezuelan central bank has seemingly thrown in the towel. More specifically, they are conducting tests to see if cryptocurrencies become part of the nation’s foreign reserves Accessing foreign funds – primarily US Dollars – has been very difficult due to current regulation and sanctions. New solutions need to be found, and the only global form of money on the market today may offer the solution the country so direly needs.

Read More: https://nulltx.com/hyperinflation-forces-venezuelan-central-bank-to-explore-bitcoin-as-a-foreign-reserve/