Venezuela to Start Regulating Cryptocurrency Remittances

Venezuela has pushed their continued support for cryptocurrencies once again in a recent announcement of consistent regulation and oversight of remittance payments completed with cryptocurrency. The news, which was announced through a decree issued by the company behind the processor of the crypto remittance payments in Venezuela and then covered originally on a Spanish blockchain website, indicates all remittances will be subject to 15% imposed fees. The company “Sunacrip” has claimed they will be the main handlers behind the processing accounts and remittances.

New Provisions and Regulations for Venezuelan Remittances

Remittances allow for fast global monetary transactions

Venezuela announced strict cryptocurrency enforcement this past January on the 31, where the country insisted that the “Petro” cryptocurrency, the countries’ inclusive digital asset, be used as the main form of transaction, value transfer, and payments across the country. Many have speculated about the Petro cryptocurrency, as the digital asset claims to be federally audited and backed at all times on a 1:1 basis equivalent to a barrel of oil. This means that unlike the value of bitcoin, the price of Petro will only, theoretically, fluctuate in value depending on the price of oil, and with a purpose of not being devalued or inflated as was the case with the Venezuelan Bolivar.

The new remittance laws set in place by Venezuela state that for each remittance transaction, a minimum of 15% will be retained for fees. For example, if you were looking to send $100 (Converted to the Venezuelan Petro) to a family member, you would be given a 15% fee, so your family member would only receive $85. Sunacrip has also placed maximum limits on the remittance payments, specifically at $3,000/monthly for the amount of Petro you are allowed to use in remittances. Where to buy cryptocurrency is also a hot topic as more exchanges are shutting down, and as Venezuela’s economic situation means that fees are overly high.

New Fees: The Controversy

Many in the Spanish and South American blockchain economy have publicly stated their complaints and disagreement with the new remittance laws. Since cryptocurrency was originally instantiated in hopes of decreasing costs, increasing speed, and cutting out the middleman so that a currency of pure decentralization and monetary use could be utilized, many are disappointed at the news. Many are upset because the new laws impose fees and middlemen for a product that was claimed to never have the aforementioned.

Additionally, civilians of Venezuela are now under even more pressure, as just recently they were forced in a public statement for change to start using the Petro cryptocurrency; now, with already near worthless fiat currencies, the civilians must switch to a new form of technology as well as deal with fees that are cutting huge amounts of their capital off when sending or receiving. The South American community has publicly indicated through Twitter and other social media outlets their discontent with the new changes and hopes that the provisions will be reviewed.

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      John Iadeluca is the founder of the Wall Street hedge fund Banz Capital. He's a blockchain developer, quant, and consultant that specializes in the digital asset sector.