Bolivia to Utilize Cryptocurrency for Energy Imports Amid Dollar Shortage

Bolivia’s YPFB will utilize cryptocurrency for energy imports amid a dollar shortage, linked to a fuel crisis and protests. This mirrors Venezuela’s previous crypto attempts with the failed petro currency, which faced trust issues and corruption, resulting in its collapse. The implications of Bolivia’s move are uncertain, given Venezuela’s turbulent cryptocurrency history.

Bolivia’s state-run energy company YPFB will initiate cryptocurrency transactions to pay for energy imports, as reported by Reuters. This decision arises due to ongoing shortages of the US dollar, compounded by a crisis in fuel supply caused by reduced natural gas exports, which have sparked protests nationwide.

A spokesperson from YPFB stated, “From now on, these (cryptocurrency) transactions will be carried out.” Bolivia follows Venezuela, which previously attempted utilizing cryptocurrency for energy payments. Six years ago, Venezuelan President Maduro launched the petro cryptocurrency under the PdVSA-Crypto scheme, seeking to generate funds amidst economic sanctions from the United States.

The petro aimed to leverage Venezuela’s substantial oil reserves, issuing 100 million tokens valued at approximately $6 billion. However, the Venezuelan parliament deemed this move illegal, determining it represented an unlawful attempt to secure the nation’s oil. Labeled as a commodity-backed cryptocurrency, the petro struggled due to widespread distrust in Maduro’s government to uphold its financial obligations.

The failure of the petro culminated in January 2024 with its collapse and liquidation of holdings due to low adoption rates and corruption allegations. This downfall impacted PDVSA, where significant sums in both cryptocurrency and fiat currency were unreported to the national treasury, leading to arrests of high-ranking officials.

Additionally, issues persisted with Sunacrip, the national cryptocurrency authority, which began a restructuring process over a year prior. In 2023, the Venezuelan government sequestered over 17,000 crypto mining machines to address excessive power consumption, resulting in the closure of numerous crypto mining operations due to ongoing blackouts in the country.

Bolivia’s decision to use cryptocurrency for energy imports signifies a significant shift amidst a dollar shortage and a fuel crisis. This move mirrors Venezuela’s earlier attempt with the petro cryptocurrency, which ultimately failed due to trust issues and corruption. As Bolivia navigates this challenging economic landscape, the success of such endeavors remains to be seen, especially in light of Venezuela’s tumultuous experience with crypto.

Original Source: oilprice.com