In the year since the COVID-19 pandemic disrupted almost every aspect of our lives, a lot has happened in the coding ecosystem around the world. What was the past year for Venezuela’s cryptocurrencies?
Even before 2020, there were already a number of companies in Venezuela that accepted many cryptocurrencies as a payment method; However, in the past year, many more people have switched to this payment method. This includes everything from the hotel industry to the popular pizza chain Pizza Hut, which is announcing it will accept Bitcoin (BTC), Litecoin (LTC), Dash, and other cryptocurrencies as a payment method.
In mid-2020, Cryptobuyer and payment processor Mega Soft announced that they would form an alliance that will allow around 20,000 merchants using their services to accept cryptocurrency payments through the Cryptobuyer Pay solution developed by Oslo Børs.
Another major milestone came in September 2020 when a Bitcoin node was connected to the Blockstream satellite network – for the first time in Venezuela. As a result of the joint efforts of Cryptobuyer and crypto provider AnibalCripto, the node was launched despite the logistical constraints imposed by the COVID-19-related lockdown measures. Likewise, node administrators announced that this was the first step towards creating an interconnected network that could process bitcoin transactions without requiring an internet connection.
Despite the ongoing economic crisis in Venezuela, the cryptocurrency industry is growing. According to the Cambridge Bitcoin Electricity Consumption Index, Venezuela is the largest contributor to the bitcoin hash rate in any Latin American country, which means the country is generating a significant amount of computing power.
However, in September 2020, Venezuela passed a new law aimed at the country’s mining industry. In addition to creating a mandatory registry and new taxes for those working in the mining industry, a controversial new Pool de Minería Digital Nacional (National Digital Mining Pool) law has been passed. Under this new requirement, miners will be required to invest their enormous energy in a new mining complex, funded by the state.
Overall, there is still no real clarity about the mining basin, meaning that it is not known how the law will be applied and it is not revealed exactly how the Venezuelan miners were implicated.
While it may seem counterintuitive that this level of government support for cryptocurrencies is often viewed as a complete restriction of citizens and their freedoms, there have been many experiments with cryptocurrencies in the past year, including plans to force Venezuelans to pay for passports. With bitcoin using payment processor BTCPayServer.
However, while the administration of President Nicolas Maduro has not finalized the passport plan, the vision for the use of cryptocurrency has not diminished. For example, Maduro proposed an anti-sanction proposal in September 2020 that aims to use cryptocurrency to evade various fines levied on the country and hopes to expand the use of crypto in various commercial transactions.
Specifically, there have been reports that the Maduro administration has used bitcoin to facilitate trade between Iran and Turkey, two of the country’s most important geopolitical allies.
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In November 2020, it was also reported that the Venezuelan military had decided to open the Centro de Producción de Activos Digitales del Ejército Bolivariano de Venezuela (Venezuelan Army Digital Assets Production Center), a hub that houses ASIC mining equipment designed to demonstrate how cryptocurrencies work. in order to generate “Cannot be opened,” according to the military command that opened the facility.