Bolivia’s YPFB will use cryptocurrency for energy imports due to dollar shortages and a fuel crisis. This decision follows similar past attempts in Venezuela with the petro cryptocurrency, which faced significant challenges and ultimately collapsed. The situation reflects ongoing issues with trust and management in cryptocurrencies.
Bolivia’s state energy company, YPFB, will soon utilize cryptocurrency to facilitate payments for energy imports due to a current shortage of US dollars. This financial strain is exacerbated by a fuel crisis resulting from reduced natural gas exports, causing widespread protests within the nation. A spokesperson for YPFB confirmed, “From now on, these (cryptocurrency) transactions will be carried out,” indicating a significant shift in their payment methods.
Bolivia is not the first South American nation to explore the use of cryptocurrency for energy transactions. In a similar vein, six years ago, Venezuelan President Nicolás Maduro launched the petro cryptocurrency under the PdVSA-Crypto initiative. This strategy emerged amid severe economic sanctions from the United States, with Maduro asserting that the petro would “allow new forms of international financing.” He announced the issuance of 100 million petro tokens, with a projected value of around $6 billion.
However, the petro was met with skepticism as it was supposed to be backed by Venezuela’s substantial oil reserves. Critics in the Venezuelan parliament deemed it an illegal act to mortgage national oil resources. The value of the petro fluctuated, initially pegged at $60 each or 3,600 sovereign bolivars. Nonetheless, due to inherent trust issues, projections indicated the petro’s failure as a commodity-backed cryptocurrency.
The collapse of the petro came to fruition in January 2024 when all holdings were liquidated amidst low adoption and scandals. Reports surfaced of the state-owned oil company PDVSA generating approximately $20 billion in cryptocurrency and other fiat payments while failing to report these to the national treasury. This negligence led to the arrest of significant figures, including former PDVSA President Tareck El Aissami. Additionally, Sunacrip, Venezuela’s cryptocurrency monitoring entity, underwent restructuring due to mismanagement.
Moreover, as part of efforts to curb power consumption amidst ongoing blackouts, Venezuela’s National Power Ministry confiscated over 17,000 crypto mining machines in 2023, forcing many miners to halt their operations.
In conclusion, Bolivia’s adoption of cryptocurrency for energy payments marks a notable shift in response to a dollar shortage and fuel crisis, echoing prior attempts in Venezuela with its petro initiative. While intentions may aim to harness modern financial solutions, the challenges faced by Venezuela’s petro highlight the complexities of trust and operational integrity within cryptocurrency ventures. The outcomes of these initiatives warrant close observation as both nations navigate their economic predicaments.
Original Source: oilprice.com
