In a bid to circumvent U.S. sanctions, the government of Venezuela has begun its first experiments with a program to convert tax revenue into bitcoin and trade it for fiat currency at foreign exchanges.
The details of this plan were revealed in a report from the Spanish-language ABC International, which claimed that the Venezuelan government is currently only testing the project at the Maiquetía International Airport (IAIM). IAIM is the largest airport in Venezuela for international flights, and all international flights are required to pay a specific tax to the Venezuelan government.
To maximize the productivity of this tax revenue, these taxes are run through an app using the Jetman Pay system, which uses a digital wallet to automatically convert these gains into bitcoin. The bitcoin is then traded at exchanges in various rival nations to the United States, such as Russia and China, for a steady influx of USD that international sanctions cannot touch.
The usage of bitcoin as a way to circumvent international sanctions is by no means a novel concept in the crypto space. The thoroughly sanctioned nation of Iran, for example, has become such a hotspot for mining operations that the government had to pass tariffs to discourage the practice’s impact on the power grid.
Ordinary Venezuelan citizens have been employing bitcoin to circumvent sanctions for several years now, but the government’s scheme is a particularly unique case. Having launched an oil-backed cryptocurrency, the Petro, in 2018, this airport scheme is now an attempt to circumvent sanctions using the tried-and-true international reliability of bitcoin.
ABC International’s report mentioned that there are currently plans to expand this endeavor in two important ways. Not only is the Venezuelan government planning to expand this tax-to-bitcoin operation plan at all major airports in the country, but it is also set to use something similar for international flights attempting to refuel. Planes stopping at these airports nationwide will have to fill their tanks courtesy of the state-run oil company, which will also be plugged into this Jetman Pay app.
With the value of the bolivar fluctuating so wildly, this will give the Venezuelan government a steady access to the world’s reserve fiat currency, regardless of what the United States government has to say on the matter.
Landon Manning is a freelance writer for Bitcoin Magazine.