by Tyler Durden
Venezuela has just taken the next step in its quest to "free" itself
from the tyranny of U.S. dollar hegemony.
One year after the
country said it would stop accepting U.S. dollars as payment for its
(ever shrinking) oil exports (saying the country's state-run oil
accept payment in Yuan instead),
Venezuelan Vice President for Economy Tareck El Aissami said
Tuesday that Venezuela will officially purge the dollar from its
exchange market in favor of Euros.
While we're sure that Venezuelan President Nicolas Maduro
would love to frame this as his latest gesture of defiance against
tyrannical imperialist overreach by Washington, which he has blamed
for aggravating the country's humanitarian crisis by waging an
"economic war" against the oil-rich nation.
Remember that the U.S.
effectively blocked the Venezuelan government from transacting in
dollars last year when it imposed restrictive sanctions on the
Maduro regime and the country's state-run oil company,
Maduro started the
process of moving the country's
DICOM system of official tiered
exchange rates in September 2017 when
he declared that Venezuela would
"new system of
"Venezuela is going
to implement a new system of international payments and will
create a basket of currencies to free us from the dollar,"
Maduro said in an hours-long address to a new legislative
superbody, without providing details of the new mechanism.
"If they pursue us with the dollar, we'll use the Russian Ruble,
the Yuan, yen, the Indian Rupee, the Euro," Maduro declared.
The sanctions have
largely excluded Venezuela from international capital markets and
the U.S. dollar-based financial system, forcing Maduro's regime to
rely on money-for-oil loans
extended by China.
Maduro and many senior members of his government have been
personally singled out for sanctions by the Treasury Department, a
punishment that Maduro has called "an honor."
To help seed the Venezuelan financial system with Euros, the
country's cash-strapped central bank is planning to auction 2
billion Euros some time between November and December.
The American "financial blockade" of Venezuela affects both the
country's public and private sectors, including pharmacy and
agriculture, and shows,
"just how far the
imperialism can go in its madness," the vice president said.
exchange rate system, DICOM,
"will be operating in
Euro, Yuan or any other convertible currency and will allow the
foreign exchange market to use any other convertible currency,"
El Aissami said.
The vice president added
that all private banks in Venezuela are obliged to participate in
the DICOM bidding system.
Even if it's insignificant relative to
China's plans to create an
alternative global financial system based on Rubles and the Yuan,
this move is one more blow against U.S. dollar hegemony, and one
more step into the open arms of China, which has helped keep
Maduro's teetering regime afloat in the face of an
assassination attempt and an aborted