*

US sanctions limit Venezuela's access to foreign currency

*

Venezuela uses USDT to buoy currency exchange

*

PDVSA has increased digital currency usage

Sept 3 (Reuters) - Venezuela's government is slowly

allowing the use of dollar-tied cryptocurrencies in currency

exchanges for the private sector, a dozen sources said, as U.S.

restrictions on oil exports reduce available foreign currency.

Sanctions by the United States, which the Venezuelan

government has characterized as "economic war," prevent many

business transactions, forcing companies seeking to buy raw

materials from abroad to exchange local bolivars for dollars

that are generated by the oil trade and foreign card

transactions and are injected into exchanges by the central

bank.

But oil revenue has taken a hit in recent months.

Though the United States Treasury Department last month

issued a new, restricted license to Chevron ( CVX ) allowing it

to export oil after a three-month pause, the license blocks any

payments to the government, reducing the quantity of dollars

available for exchange.

In response, the Venezuelan government has since June

allowed the use of more USDT, a digital currency also known as

Tether, whose value is pegged to the U.S. dollar and designed to

maintain a stable value, according to the private and financial

sector sources, who asked to remain anonymous for fear of

repercussions.

The use of digital currencies helps keep the economy

operating amid the sanctions, including domestic production of

basic goods such as food.

"When one operation closes, others open," said one business

person about the use of crypto.

Another source estimated the use of crypto will grow.

State-run oil company PDVSA has since last year been slowly

increasing its digital currency usage and moving sales to USDT,

sources told Reuters last year.

Tether did not respond to a request for comment, but said

last year it respects the U.S. Treasury's list of sanctioned

entities.

Neither the Ministry of Communications nor the central bank

responded to questions, but Vice President Delcy Rodriguez said

during an August meeting with business people that

"non-traditional mechanisms of management in the exchange

market" were being implemented, without providing more details.

The sources said a limited number of banks sell the

cryptocurrencies, usually USDT, to some businesses in exchange

for bolivars. The businesses must have a digital wallet approved

by the authorities and receive the value of the transaction

there.

Businesses are then free to either sell the crypto or use it

to pay domestic or international providers.

There are no official figures for crypto sales, but local

analyst firm Ecoanalitica has estimated that $119 million in

cryptocurrencies were sold to the private sector in July.

The Venezuelan central bank injected some $2 billion into

the currency exchange market in the first seven months of the

year, 14% less than during the same period last year, according

to estimates by the private and financial sectors.

The restrictions on the Chevron ( CVX ) license might further reduce

the availability of foreign currency, analysts have estimated.

Oil exports declined about 10% in July from the previous month,

according to vessel tracking data and company documents.

"The availability of exchange always has a ceiling," said

lawmaker Orlando Camacho, who is close to the ruling party and

the head of a guild for medium-sized companies. "The role of

companies is also to guarantee foreign exchange through their

exports."