Bitcoin is leading cryptocurrency in Venezuela that the government has started using it. Yes, you heard correctly; also the Venezuela government has decided to drop its own failed Pedro to use the BTC instead.
Based on the investigation done by the Spanish newspaper ABC, Venezuelan President Nicolás Maduro and his administration are likely to utilizing tax revenue and cryptocurrencies as a part of a broader effort to avoid economic sanctions.
According to the report by ABC on July 22, President Nicolas Maduro has validated the use of the app that collects aeronautical taxes and their conversation to the bitcoin.
Surprisingly, the app which is being used by the teams is developed by an American company, and it is known as Jet Man Pay. Venezuela is most likely converting Bitcoin (BTC) funds through partner exchanges in countries like Hong Kong, Hungary, Russia, and China. Moreover, the funds were converted and then sent back to Venezuela, as per the report.
After trading, the funds which are obtained from the companies are deposited as USD in accounts which belong to the government of these countries. By following this, Venezuela avoids sanctions of dealing with the US directly.
As per ABC, the design of the process was made before a year, and it includes a unique method that allows Maduro to avoid sanctions.
Currently, he plans to extend the aviation tax collection scheme to various airports outside the capital, Caracas, and will soon sign a deal to apply it to aircraft refueling payments.
At the moment, airlines providing service to Venezuela face issues making those payments because the US sanctioning the accounts of the state oil company, PDVSA. The publication cites documentation it reportedly says privately:
“So far this year, the Venezuelan government has not received a dollar to refill the gas tanks because the airlines do not know how to pay for the service due to the blocking of the PDVSA accounts.”
The initiative is helpful because of the absence of Pedro in the supply chain; the Maduro system championed in its way about economic restriction when it was launched in 2018.
For a long time, Venezuela continues to suffer from Hyperinflation; the history of the Pedro might seem like a failure. But, the love of the government for the cryptocurrency is still alive, and they have chosen to take a more decentralized option to avoid sanctions. Will the use of Bitcoin increase in the country? Absolutely yes.
The only concern here is about the US government either it will act against Jet Man Pay for assisting its foreign enemies or the country will be able to move forward safely.
