The story of Venezuela and its affinity towards cryptocurrencies to save the economy is a very dynamic and interesting one.
The President of Venezuela, Mr. Nicolas Maduro has embraced digital currencies as a way to fight back the plunging bolivar and the restrictive US sanctions imposed on the country. Â What has killed the economy, however, is the ever growing inflation rate, which reached a growth rate of 10,000,000%.
Now, the Venezuelan President, together with the United Socialist Party of Venezuela have been accused of avoiding in certain ways the imposed US sanctions through cryptocurrencies.
Maduro initiated the government-backed digital currency called the petro. The agency behind the coin’s distribution and management is called Sunacrip, or The National Superintendency of Crypto Assets and Related Activities.
Citizens of Venezuela can receive petro from Sunacrip and other authorized by the government crypto exchanges by purchasing it with digital assets such as LTC and BTC. According to press, some believe that the Sunacrip was intentionally built to collect taxes with the help of digital currencies.
So far so good, but the problem appears to be the following: after Sunacrip collects the taxes, it converts them to bitcoin and sends them to international accounts, including Hong Kong exchanges, Russian and Hungarian ones.
Some speculators now believe that the entire “scheme” is invented to just bypass the strict regulatory framework imposed by the Trump Administration. In April this year, Trump imposed restrictive sanctions against Venezuela and the central bank of the country, restricting the President and tightening the finances coming from the Socialist Party of Venezuela. The entire US restriction serves to cut the access of the Venezuelan’s central bank to the US dollar.
Given the not-so-popular petro and the growing economic and social problems in Venezuela, the country may soon face even harsher regulatory sanctions and deepening economic crisis.