The government of Venezuela has officially begun to regulate cryptocurrency remittances, according to an announcement by the Venezuelan National Superintendency of Crypto Assets and Related Activities (also known as “SUNACRIP”) on February 7. The decree was published in the country’s Official Gazette, issue No. 41,581.
Now, individuals who send and receive cryptocurrency remittances may be required to respect a monthly transactional limit and to pay up to 15 percent of each transactional amount. The decree also granted Sunacrip with the power to set values of cryptocurrencies in sovereign bolivars, request data from parties involved in a given transaction, and to specify tariffs and limits.
Crypto Remittances Will be Limited, Taxed
“The sender of the remittances referred to in this ruling is obliged to pay a financial commission in favor of SUNACRIP up to a maximum amount of 15% calculated on the total of the remittance,” the decree reads (translated quote.) SUNACRIP will charge a minimum fee “equivalent to 0.25 euros [~$0.28] per transaction.”
Latin American news source CriptoNoticias reported that SUNACRIP “will rely on a technological platform, which will determine the processing of such operations,” although it did not specify exactly which technology platform this might be. It’s also unclear how the regulator will manage to enforce the new limits and tariffs that it has put into place, given the fact that most cryptocurrency networks have a high degree of anonymity.
If Regulations are Successful, Crypto Could Face the Same Fate as the Bolivar
The limits that may be placed on cryptocurrency remittances could cause serious trouble for Venezuelans who rely on crypto payments from family members abroad to survive. Ryan Taylor, CEO of cryptocurrency Dash, recently told CryptoSlate that “over 30,000 people are crossing the [Venezuelan] border every day, they are doing it out of desperation. They need to send money back to their family.”
For years, Venezuela has been facing a serious financial crisis. The country’s fiat currency, the Bolivar, is chronically hyper-inflated. Venezuelan President Nichola Maduro has attempted to “solve” the country’s problems by introducing the “Petro,” a national cryptocurrency backed by commodities, but faith in the project is essentially non-existent.
When you live in a hyper-inflationary economy. The picture shows a bill for 9,700 gallons of petrol from a tank truck. The gas station paid the oil company (PDVSA) 2.01 bolivars, the equivalent of 0,34 cents. Via @prodavinci https://t.co/IAOV3hBDFS pic.twitter.com/TPorW1pGTz
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— Moises Rendon (@MoisesRendon) December 13, 2018
Taylor also explained that reliance on cryptocurrency is especially acute in Venezuela because the country’s existing financial infrastructure is so broken. “Sending through the bank takes a significant amount of time and high fees. If they have a currency that is digital and useable at merchants throughout the country, then that solves a real problem for them,” he said.
When it comes to fiat currency within Venezuela, Taylor said that “there are limits on the amount people can transfer, the number is so low that one dinner with your friends would wipe it out—if you want to make a large purchase, you need five friends to each pay for a part of it.”
2019 resolution, make a video travelling to Caracas and trying to survive only spending crypto. In Caracas apparently there hundreds of merchants accepting DASH
— Crypto For Venezuela! (@CryptoForVzla) December 12, 2018
Cash is completely broken, when you think just use a credit card, even small purchases, that can be a problem, you need something that is cash-like, and we provide that solution without the restrictions.” If the new regulations manage to be successfully enforced, crypto could face a similar fate in Venezuela.