Venezuela Announces Set of Regulations for Cryptocurrencies and Blockchain Tech

Venezuela seems to be eager to become a country where the activities related to the use of cryptocurrencies and blockchain technologies are fully regulated and to that end, it announced a few hours ago the promulgation of a “CONSTITUENT DECREE ON THE INTEGRAL SYSTEM OF CRYPTOASSETS“.

In accordance with this Law, virtually all activities related to cryptocurrency, including mining, custody, trading, exchange platforms, issuance, and sale of this type of digital assets, are considered part of this integral system.

Under the new law, a national agency (SUNACRIP) is created with regulatory powers in all matters related to crypto and digital assets. Likewise, SUNACRIP will have 4 Intendencies:

1. The Intendancy of digital mining and similar processes.
2. The Intendancy of promotion and development of digital assets and related activities.
3. The Intendancy of crypto-financial services.
4. The Intendancy of audits.

Venezuela is among the first countries to promote the use of cryptocurrencies as legal mechanisms for economic exchange. The creation of Petro as “Sovereign Cryptoasset” recognized as legal tender has been widely criticized, but undoubtedly put the country in the eye of the community of crypto users in the world.

The Petro was created through a decree, as the tokenization of a futures contract for a barrel of Oil, however, after a series of changes, the Petro whitepaper mentions that the value of that token will be the product of a basket of several tokens multiplied by a discretionary value known as a “corrective factor“.

It is also important to note that, in Venezuela, several values are handled for Petro ranging from 36,000 Bolivars as the official value of a Petro when used a unit of account for the calculation of wages, to 197,892 Bolivars as the “official value” according to the Central Bank of Venezuela which sets a price of $ 60 per token at a rate of 3,298 Bolivars per Dollar. (For more information, chech the screenshots below)

Likewise, prior to this law, the country created a Constituent Decree on Cryptoassets and the Sovereign Petro Cryptocurrency, published in the Official Gazette of the Bolivarian Republic of Venezuela No. 6,370 Extraordinary dated April 9, 2018. It authorized the use of cryptocurrencies as legal payment mechanisms throughout the country, promoting their use and adoption.

Promotion and Guarantee of Use
The Venezuelan State shall promote, protect and guarantee the use of the Criptomonedas as means of payment in public institutions, private, mixed or joint enterprises, inside and outside the national territory.

However, although this new decree is more extensive, it seems to be more coercive, giving more control to SUNACRIP to regulate all activities related to crypto. Now this organism can initiate trials for corporal and pecuniary penalties against those who violate the law. Among the most outstanding points of this law are:

• In relation to mining, it is necessary to register with Sunacrip, regardless of the used hash (in theory, from a miner who uses his GPU to the owner of a mining farm must declare to SUNACRIP that he performs this activity). Occasional, domestic and corporate mining are also regulated.
• Whoever is discovered mining without the proper license will have to pay a fine of 6000 to 18000 dollars and any miners (ASIC, RIG or similar) will be retained.
• Anyone who illegally obtains a mining license will be fined to the same extent if discovered.
• SUNACRIP has the power to establish the fees to be charged by intermediaries and exchanges.
• A National Treasury is created for the sale of sovereign crypto assets (Digital assets created by the Country, such as the Petro).