By converting gold reserves, oil revenues, and cheap hydroelectric power into Bitcoin, Venezuela built a $60 billion digital shield against the US dollar and international financial pressure. move that shook global powers and ultimately played a role in his removal.
In the past few years, Venezuela has quietly built one of the world’s most surprising Bitcoin reserves possibly around 600,000 Bitcoin, worth tens of billions of dollars. This didn’t happen by accident it was a deliberate plan by President Nicolás Maduro to protect the country’s wealth from international sanctions and the power of the US dollar.
How it started
Around 2018, Venezuela was hit with heavy international sanctions and was pushed out of the SWIFT banking network, which most countries use for global payments. This meant it became extremely hard for Venezuela to move money, trade, or receive payments through normal banks. Looking at how Russia and Iran were coping, the Maduro government began shifting a lot of its international financial transactions into Bitcoin. The privacy and security of Bitcoin impressed the leadership so much that they decided not just to use Bitcoin for payments, but to convert the country’s real, physical assets like gold and oil into this digital asset.
Turning gold into Bitcoin
Venezuela’s first big move was with its gold. Gold has always been a classic way for countries to store value, but it is also visible and easier to track or seize when held overseas.
In 2020, a mining company called Original was given rights to a “mining arc” in Venezuela, and from this area about 73 tonnes of gold were produced. Instead of simply holding or selling this gold in the traditional way, the Venezuelan state sold the gold and converted the value directly into Bitcoin.
At that time, this 63 tonnes of gold was worth around 2 billion US dollars. As Bitcoin’s price increased over the years, the value of that converted gold reportedly grew to around 40 billion US dollars, showing how dramatically this strategy could pay off in a rising Bitcoin market.
Oil money: from USDT to Bitcoin
Gold was only the first step. The second – and even bigger – pillar of Venezuela’s wealth is oil. One of the best known assets was the Citgo refinery in the United States, once called the “crown jewel” of Venezuela, owned through the state oil company PDVSA.
By 2023, the Maduro government had started taking around 80% of PDVSA’s oil payments in USDT (Tether), a popular dollar-pegged stablecoin used widely in the crypto world. On the surface this looked like a clever way to move around US sanctions, but there was a catch: USDT runs on a private blockchain, and under pressure from the US government, funds in USDT can, in theory, be frozen.
To reduce that risk, the Venezuelan government began converting large amounts of the USDT they received from oil sales into Bitcoin as well. That meant that over time, not only the country’s gold wealth, but also its oil income, was being shifted into a form that is harder for other nations to control.
Mining their “own” Bitcoin
The third part of the story is mining. Buying Bitcoin on the market is one thing. Mining it yourself is another, and Venezuela realised it had a key advantage here: very cheap electricity.
Venezuela is home to one of the world’s largest hydroelectric power plants, the Guri Dam. hydro power is relatively cheap once the dam is built, it becomes attractive for energy-intensive activities like Bitcoin mining.
Using electricity from Guri, the government and connected entities reportedly started running Bitcoin mining operations. This allowed Venezuela to generate new Bitcoin directly, instead of always having to buy it from others.
Put together, Venezuela’s Bitcoin stockpile seems to come from three main sources:
- Selling gold and buying Bitcoin.
- Receiving oil payments in USDT and converting them into Bitcoin.
- Mining Bitcoin using cheap hydro power from the Guri Dam.
Through these three channels, the country is believed to have built a reserve of around 600,000 Bitcoin.
Maduro’s logic was simple . He knew that if the United States and its allies wanted to apply maximum pressure, they would target Venezuela’s hard assets
Gold held in foreign vaults can be frozen or seized.
Oil assets and overseas refineries can be taken over legally or politically
Bank accounts in dollars or euros can be blocked through the global financial system.
Bitcoin, however, works differently. Ownership of Bitcoin depends on one thing: who controls the private keys to the wallet. If those keys remain in the hands of trusted people in Venezuela, no foreign government can simply “take” those coins
This is why there is a popular saying in the crypto world: “Not your keys, not your crypto.” If you don’t control the keys, you don’t truly own the coins. In Venezuela’s case, the opposite is also true: as long as the state controls the keys, its Bitcoin is very difficult to touch, even for a superpower
Venezuela’s large Bitcoin reserve shows how the country has tried to build a parallel financial system outside the US dollar by bypassing traditional banking and sanctions. The idea behind Bitcoin was to create money that isn’t controlled by any one country, especially powerful financial networks. For a heavily sanctioned state like Venezuela, this offered a way to move value, trade, and store wealth even when banks were blocked. It doesn’t mean ordinary people are better off inflation, poverty and mismanagement remain severe but at the state level Bitcoin became a shield against sanctions that gold or cash couldn’t provide. Venezuela’s story highlights how geopolitics and new technology can collide, turning Bitcoin into a tool for national survival.
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