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India Won’t Pay for Venezuelan Oil With ‘Petro’ Cryptocurrency

Last Updated March 4, 2021 5:08 PM
Samburaj Das
Last Updated March 4, 2021 5:08 PM

Despite being offered a reported 30% discount in crude oil imports from Venezuela for payment in petro, India has no plans to use the South American nation’s cryptocurrency after being hindered by its central bank crypto curbs.

Indian foreign minister Sushma Swaraj was addressed reporters during a news conference this week when she was asked about a Venezuelan trade deal involving crude oil and a reported discount of 30 percent contingent on the purchase being made with the petro, Venezuela’s state cryptocurrency.

In response, the Indian foreign minister said the country has no plans to use the petro in purchasing oil, citing an order from India’s central bank which does not permit trade using cryptocurrency.

The Indian official reportedly  stated:

“We cannot have any trade in cryptocurrency as it is banned by the Reserve Bank of India. We will see which medium we can use for trade.”

The Reserve Bank of India (RBI), India’s central bank, announced a crippling policy in April mandating RBI-regulated financial institutions prohibit their clients and users from purchasing cryptocurrencies. Banks were also barred from providing services to businesses “dealing with or settling” cryptocurrencies.

While it isn’t explicitly stated that the ban extends to transactions settled in cryptocurrency, there is no surprise in the Indian government opting not make a trade deal in the petro despite the substantial discount offered.

Venezuela has the world’s largest oil reserves for any nation and announced its oil-backed cryptocurrency, the petro, in December in what would soon become the world’s first state cryptocurrency. Devised as a payment instrument to combat the economic sanctions and a US-led financial blockade, the cryptocurrency has seen plenty of criticism from within the country. In March, Venezuela’s National Assembly declared the ‘unconstitutional’ petro ‘a fraud’.

Notably, India isn’t fussed about US sanctions facing Venezuela and Iran, the latter which has now become India’s top crude oil supplier .

“India follows only UN sanctions, and not unilateral sanctions by any country,” Swaraj added, insisting India would continue to trade with Venezuela despite oil imports from the South American nation being at their lowest levels  in over five years.

Featured image from Shutterstock.