Venezuela’s government and opposition are nearing an agreement to transfer about $4 billion in central bank gold reserves from the Bank of England to the Federal Reserve Bank of New York, the Financial Times reported on Friday.
Reuters could not immediately verify the report, which cited four people familiar with the discussions.
Under the proposed arrangement, the interim government of Delcy Rodríguez would gain legal control of the gold but would not be able to sell the reserves immediately. Instead, the bullion could be used as collateral for government borrowing, including financing reconstruction following June’s twin earthquakes.
The reported arrangement could give Caracas access to an important financial asset while preventing the immediate liquidation of the reserves.
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Gold at the center of Venezuela’s financial recovery
The gold has been held in the Bank of England’s vaults for years and has become part of a prolonged legal dispute over who has authority to control Venezuela’s reserves.
The Bank of England has withheld about 31 metric tons of Venezuelan gold, worth roughly $4 billion, amid the dispute over the legitimacy of Venezuela’s government.
Venezuelan authorities have previously sought access to the reserves as the country faces severe economic pressures and seeks additional resources for reconstruction.
Last month, National Assembly chief Jorge Rodríguez said Venezuela was working to recover the gold held in the Bank of England’s underground vaults, citing the need to address rising inflation.
Using the bullion as collateral could allow the government to raise financing without immediately selling the reserves.
A long running legal dispute
The dispute over the gold dates back to 2019, when Britain joined dozens of countries in recognizing opposition leader Juan Guaidó as Venezuela’s legitimate president following the disputed 2018 election.
The Bank of England subsequently refused to release the reserves, citing the question of which Venezuelan authorities had legal control over them.
The gold has since been at the center of prolonged legal proceedings in British courts.
The political situation has changed substantially since then, including Nicolás Maduro’s capture by the United States in January and the emergence of Delcy Rodríguez as acting president.
Rodríguez has also appealed to King Charles for the release of Venezuela’s gold.
Britain distances itself from the dispute
A British Foreign Office spokesperson said the government was not a party to the legal proceedings determining who should control the Venezuelan gold.
The spokesperson also stressed that British courts and the Bank of England operate independently of the government.
“The UK maintains its longstanding position of support for a democratic transition of power in Venezuela which reflects the will of the Venezuelan people,” the spokesperson said.
The Bank of England and the Federal Reserve Bank of New York did not immediately respond to Reuters’ requests for comment.
The Venezuelan government and opposition also could not immediately be reached.
What the proposed transfer could mean
If finalized, the arrangement would give Venezuela a potential source of financing without requiring the immediate sale of its overseas gold reserves.
The proposed move would also shift the legal and financial management of the bullion from London to New York, while keeping restrictions on how the reserves could be used.
For Venezuela, the gold represents more than a financial asset. Its control has become intertwined with the country’s political transition and the competing claims of successive governments.
A deal to move the reserves could therefore provide Caracas with additional financial flexibility while also offering a possible mechanism to resolve part of a dispute that has kept Venezuela’s gold locked in British vaults for years.
With information from Reuters.
