Since governments around the world came to terms with the reality of cryptocurrencies and realized their true potential, countries have been scrambling to incorporate them in their financial ecosystems. The trouble with cryptos and the government is that the latter wants to control something that wasn’t meant to be controlled by any particular person or institution for that matter. So they are struggling to find a balance between offering a thriving space for the crypto market and exerting some amount of control on it.
Amongst those countries is Venezuela, which has successfully crafted a crypto bill that came into effect on Jan.31. According to the official announcement in the government’s official media outlet, Gaceta Oficial, the country’s new crypto bill establishes a clear-cut legal framework for the crypto industry.
The Constituent National Assembly approved the bill, which is an alternative to the country’s Parliament, which is titled “Constituent Decree on the Integral System of Crypto Assets”. In addition to providing a set of rules for miners, crypto entrepreneurs and regular traders, the bill also gives short definitions of key crypto terms like, crypto assets, blockchain, mining, cryptography amongst others. Furthermore the bill contains a total of 63 articles.
It also introduces the concept of a sovereign crypto asset, which refers to any currency issued in Venezuela and authorized by the government. Moreover the bill establishes the concept of licensing, which is obligatory for all the mining entities and crypto exchanges in the country. And failure to comply with this obligation will lead to fines.
The concept of a national crypto watchdog, Sunacrip, has also been introduced in the bill. Which will have the power to inspect crypto-related activities in entirety. However it doesn’t stop at inspection, according to article 11 of the crypto bill, Sunacrip has been given authority to control “the creation, emission, transfer, commercialization and exchange” of all crypto actives within Venezuela. It also has the ability to control any crypto commercial platform in the country, be it local or international, centralized or decentralized.
Furthermore, the decree also describes the registration procedures for crypto exchanges, wallets, and mining entities. It also provides various kinds of licenses for crypto startups in the country, depending on trading volumes, types of crypto assets they manage and other criteria.
The bill also explains that, any case of violation of the licensing rules by any of the crypto-related company will result in its owners being punished with up to one to three years in prison, and fined 50 to 100 sovereign crypto assets ($3,000 to $6,000). The same applies if any crypto firm fails to properly register with Sunacrip.
The rules laid out in the bill do seem pretty rigid. Will Venezuela’s crypto market manage to thrive in such a strict environment? Or will it suffocate under the harsh control? Stay tuned to BlockPublisher for further updates.