Bolivia’s YPFB to Utilize Cryptocurrency for Energy Imports Amid…

Bolivia’s YPFB is set to transact in cryptocurrency for energy imports due to dollar shortages. This shift is happening amid a fuel crisis linked to natural gas export declines. Similar attempts have been made in Venezuela with the controversial petro cryptocurrency, which ultimately failed due to credibility issues and unresolved financial scandals.

Bolivia’s state energy company, YPFB, plans to use cryptocurrency for energy imports due to a pressing dollar shortage. This shortage has coincided with a fuel crisis, stemming from insufficient natural gas exports, which has sparked protests nationwide. According to an YPFB spokesperson, “From now on, these (cryptocurrency) transactions will be carried out,” signifying a notable shift in payment methods for energy resources.

Bolivia’s initiative is not unprecedented within South America. Approximately six years ago, Venezuelan President Maduro introduced the controversial petro cryptocurrency under the PdVSA-Crypto scheme. Faced with stringent economic sanctions from Washington, Maduro claimed that the petro would “allow new forms of international financing” and proposed issuing 100 million petro tokens valued at around $6 billion, linked to the country’s extensive oil reserves.

However, Venezuela’s petro faced criticism, with the parliament declaring it an illegal method of securing the country’s oil. Trust issues plagued the venture from the start, as skepticism surrounded Maduro’s government’s commitment to maintaining the necessary reserves. Consequently, the petro’s value plummeted in January 2024, leading to the liquidation of all holdings amid scandals and poor market adoption.

The downfall of the petro was exacerbated by revelations that former officials sold oil shipments, receiving around $20 billion in cryptocurrency while failing to report these funds to the national treasury. This scenario resulted in significant criminal investigations and prompted the arrest of high-ranking officials, including ex-PDVSA President Tareck El Aissami. Additionally, Sunacrip, Venezuela’s cryptocurrency regulatory body, has been undergoing a restructuring process for over a year.

Venezuelan authorities have also targeted crypto mining operations amid ongoing energy crises, seizing more than 17,000 mining machines in an effort to curb power consumption. This crackdown has compelled numerous crypto miners to discontinue their operations, highlighting the broader implications of the nation’s energy challenges related to cryptocurrency use.

In summary, Bolivia’s foray into using cryptocurrency for energy imports reflects a significant adaptation to current economic challenges, specifically a dollar shortage. This action brings to mind Venezuela’s past attempts with the petro, which ultimately failed due to trust issues and corruption. With both countries facing critical energy deficits, the future of cryptocurrency in these sectors remains uncertain and laden with obstacles.

Original Source: oilprice.com