Bolivia’s YPFB will use cryptocurrency for energy imports due to dollar shortages, mirroring Venezuela’s past attempt with the petro crypto. Both nations face significant challenges in their energy sectors, highlighting the complications of cryptocurrency adoption amidst economic crises.
Bolivia’s state energy company, YPFB, will now utilize cryptocurrency for energy imports, primarily due to a significant shortage of US dollars. This situation has escalated a fuel crisis caused by reduced natural gas exports, resulting in nationwide protests. A YPFB spokesperson confirmed, “From now on, these (cryptocurrency) transactions will be carried out,” indicating a strategic shift in financial operations.
This move follows a precedent set by Venezuela, which introduced the petro cryptocurrency six years ago as part of the PdVSA-Crypto scheme. Initiated by President Maduro amid heavy U.S. sanctions, this digital currency aimed to generate funds through the backing of the nation’s considerable oil reserves, with an initial issuance of 100 million petro tokens valued at approximately $6 billion. However, the Venezuelan parliament condemned it as an unlawful attempt to secure loans using national resources.
The petro cryptocurrency, pegged at $60 or 3,600 sovereign bolivars per token, faced skepticism regarding the Venezuelan government’s commitment to its backing, leading to widespread distrust. This skepticism contributed to its eventual failure, as seen in January 2024, when all associated holdings were liquidated due to low adoption and corruption scandals involving government officials.
Venezuela’s troubles compounded as the National Power Ministry confiscated over 17,000 cryptocurrency mining machines in 2023, aiming to mitigate power consumption amidst ongoing blackouts that disrupted many operations in the crypto sector. These actions reflect the continuing struggles of the country’s energy and economic framework, further complicating the nation’s already unstable financial landscape.
Alex Kimani, a veteran finance writer, provides insights into this evolving situation surrounding Bolivia and Venezuela, shedding light on the implications of cryptocurrency in energy transactions amid economic distress.
Bolivia’s decision to adopt cryptocurrency for energy imports highlights a significant shift in response to a dollar shortage and a fuel crisis. This move is reminiscent of Venezuela’s previous attempt with the petro cryptocurrency, which ultimately failed due to various issues, including trust deficits and governmental corruption. As both nations navigate these challenges, the implications for their energy sectors and economic futures remain critical and uncertain.
Original Source: oilprice.com
