Cryptocurrency is a sensitive topic in Venezuela and current policies’ directions are somewhat contradictory. Mining crypto was illegal not too long ago but now somewhat encouraged. Crypto Mining was banned in Venezuela in 2017, and as of Jan 24, 2018, people in Venezuela were mining for blockchain at huge personal risk of being raided by the police and arrested. (Source). People were arrested on spurious grounds such as “energy theft”, and officials have confiscated some mining rigs and then started using it themselves to mine for blockchain. (Source)
However, the government did a sudden about-turn in 2018. Due to the failed economy, cryptocurrency is one of the only things allowing people to maintain their incomes. Recently, President Madruo announced plans for a national cryptocurrency, the Petro, which is perhaps the reason for the about-turn shift in policy. In March 2018, the Venezuelan government called for citizens to build cryptocurrency mining farms throughout the country and also established a mining program which the president hopes will attract a million people. (Source). The government has also started a school in Caracas to teach about cryptocurrencies and is moving to set up mining farms in Venezuelan universities. (Source).
Anyone mining for crypto is required to register with the government. People are divided about whether or not they trust the government’s intentions and it seems that many are deciding to go underground. (Source). Despite this, seizures of mining equiment have been reported as late as April 2018 (Source).
President Maduro has decreed that the Petro will become legal tender for all transactions involving government institutions within 120 days of the passing of the measure through the Constituent Assembly on April 9, 2018. The Constituent Assembly is a parliament convened by Maduro to rewrite the constitution and it quickly gave itself legislative powers, currently holding de facto power to write legislation and replacing the opposition-led National Assembly which Maduro dissolved in 2017. Many pundits and rating sites are calling the Petro currency a scam despite the government pushing its use. The government also set up a National Cryptocurrency Treasury to manage and regulate all crypto assets as well as a national virtual asset exchange. It has also already approved the Petro for Venezuelan tax payments. (Source 1, Source 2). A news agency reports that, “ “According to the document approved by the Constituent Assembly, President Nicolás Maduro will have the power to regulate the issuance, organization, and operation of the Petro.” (Source).
Given this climate, it is impossible to see where the status of crypto will end up in Venezuela. Although blockchain activities are no longer expressly banned, engaging in them can still get one in trouble. Crypto is exploding in the country, with many people seeing it as a way out of a failed economy, however, the legal implications of this explosion has yet to fully manifest.
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