Latin America: From State Support of Cryptocurrency To Jail For Mining
RegulationBit News Today2 min read
Both Mexico and the Isle of Man allow digital currencies to serve as payment methods alongside their official money. Just as many nations issue government bonds to finance initiatives, Antigua and Barbuda permits charities and public projects to obtain financing through state-backed initial coin offerings.
State-backed initiatives and adoption in Venezuela and the Caribbean
The utilization of a blockchain platform for a secure digital Eastern Caribbean Dollar, employing distributed ledger technology, is also in development. Venezuelan President Nicolas Maduro invited all 10 members of the Bolivarian Alliance for the Peoples of Our America (ALBA) countries to mutually support the creation of the Petro, the proposed oil-backed cryptocurrency. Maduro mandated the issuance of an initial 100 million petros, with each token ostensibly backed by a single barrel of oil. Maduro has already allocated 5 million barrels of Venezuelan oil for this purpose. The petro is slated to launch in six weeks via auction, as it will be pre-mined. On the first day of its sale, Maduro claims that the state-backed petro raised $735 million. The Venezuelan government has touted petro tokens as backed by Venezuela’s extensive oil reserves, but they are not.
Internal opposition, hyperinflation, and mining crackdowns in Venezuela
The Venezuelan parliament called the Petro an illegal currency. The parliament, which has opposed President Maduro since the Socialist Party lost its majority in 2016, has been vocal in its opposition to what it views as a fraudulent currency. Venezuela, plagued by both hyperinflation and EU and US sanctions, has witnessed substantial Bitcoin use as citizens turn to digital currencies instead of the failing government-issued Bolivar. To some, the heavy circulation of Bitcoin across Venezuela marks the onset of one of the earliest instances where a sovereign state undergoes Bitcoinization.
Strict prohibition and criminal enforcement in Bolivia
The ASFI issued a statement to remind the public that virtual currency of any kind is prohibited, emphasizing the importance of reporting cases where people try to exploit personal and family savings. Bolivia has intensified its crackdown on cryptocurrency, arresting 60 people at a workshop on the grounds of running a "pyramid scheme. Governments around the world have codified Bitcoin as a legal mode of payment, and the ASFI does produce evidence to support its pyramid scheme accusations. Bolivia's apparent confusion over cryptocurrency is accompanied by policies that are even harsher than those seen in Venezuela, another South American economy.
