The Bank of England has refused the request of the Venezuelan government to turn out more than $550 million dollars worth of gold. The Bank has refused on the premise that these funds must be safeguarded. Maduro can use this funds in improper ways, officials said to justify the decision.
Venezuelan Gold Refused
Officials from the Venezuelan government have tried to retrieve a big amount of gold from the Bank of England, but the bank has refused to turn it in. Venezuela has over 14 tonnes of gold in the vaults of this bank. Several attempts to retrieve it have been unsuccessful. They mention concerns of the possible use that Nicolas Maduro could give to the gold.
Often associated with narcotics, and with several officials facing sanctions from the US government, the Venezuelan government faces a lack of trust from the international community. Using the gold with money laundering objectives is one of the main concerns.
Other officers think that Maduro can use the gold for his personal gain. But nobody knows for certain why the gold is held. Earlier this month there was some information about the impossibility of getting insurance for this cargo. After all, a big ship capable of holding 14 tonnes needs to be insured.
Venezuelan Gold For What?
As mentioned earlier, one of the major concerns is the destination of the gold. Venezuela is facing the most intense economic crisis in its history. With inflation levels skyrocketing and the fiat currency losing value at an accelerated rate, something needs to be done. The government must be hungry for resources in foreign currency, and this evidences it.
Retrieving this gold could be a relief for the state. It could be used as collateral to emit more debt bonds for obtaining resources. Also, the government has sponsored saving plans for the people to invest its foreign currency into gold certificates and Petros. This gold could go for this objective.
Petro, Gold, And Cryptocurrency
This situation shows how important is to have possession of an owned object, be it gold, silver, or any commodity. The new whitepaper of the Petro, the first official cryptocurrency says that the Petro is backed up by a basket of Venezuelan commodities. Gold, as the default commodity, is in that list. So in a way, this gold could enable the issuance of Petros in the near future.
But this is highly unlikely. the Petro wallets are still not functioning and the Venezuelan people can’t buy Petros with local currency yet. But in the meantime, the gold will still be in the vaults of the Bank of England.