Venezuela To Create Crypto Based Central Bank

Venezuela To Create Crypto Based Central Bank

Venezuela will reportedly be creating a central bank specifically for cryptocurrencies. This news has been revealed as it was also revealed that the nation’s National Constituency Assembly was in the process of preparing for reforms on the nation’s Constitution to include the soon to be created cryptocurrency central bank as well as a court that would be higher than the Supreme Court.

Reforms Draft To Be Tabled In Thirty-Five Days

Reuters has reported that this news was revealed by Hermann Escarrá, a supposedly influential member of the assembly which will be preparing the proposed constitutional reforms.

A draft of the proposed constitutional reforms is expected to be presented before the National Constituency Assembly in the next thirty-five days. Though the specific changes to be made to the constitution have not been revealed as yet, with government officials closely associated with the move have not been very forthcoming with the fine details. What has been assured however is the creation of a cryptocurrency central bank.

Escarrá has been quoted as saying that there will indeed be a crypto-based central bank whose functions will be incorporated with those of the national Central Bank namely exchange, financial policy, and monetary functions.

The National Oil-Backed Digital Coin

National Oil-Backed Digital CoinThese proposed reforms are reportedly going to also affect the Petro, the cryptocurrency backed by oil that the country launched this year while creating another court, a constitutional guarantees court that will have more authority than the Supreme Court of the nation.

Upon the launch of The Petro, the president ordered companies that are owned by the state to accept the cryptocurrency. He has also revealed that the country might be considering charging exports using the Petro. Venezuela has in the past offered to extend a 30 discount on its crude oil to India if it purchased the crude in Petro, but India refused the offer.

The Petro has been received as a tool that the country is looking to use for drawing foreign investment and at the same time as a go around for avoiding international sanctions. There have been various oppositions voiced against the Petro with some saying that it is undermining other legitimate cryptocurrencies while the president of the United States, Donald Trump, went on to ban US citizens from using the Petro in any transactions. The Venezuelan government, however, did not seem fazed by this, actually terming it as free publicity for the cryptocurrency.

According to Escarrá, the proposed changes to the constitution of Venezuela will have more local companies being given more opportunities to access foreign investment as long as the state gets even greater access.

New National Fiat Currency

These proposed developments in the crypto space have been seen as an attempt for the government to reel in the runaway inflation that the country is currently experiencing. The president has announced the launching of another fiat currency aimed at reducing the number of zeros on the national currency, the bolivar. This new fiat currency will reportedly be based on the Petro.

August 16, 2018

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Samantha Mitchell