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What does Venezuela need to become a crypto-nation?

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Key facts:
  • In one respect, adoption could define the path of a crypto-nation.

  • Cryptocurrency regulation (or lack thereof) may be critical to a crypto-nation.

Data on cryptocurrency adoption in Venezuela reveal the status of these economic technologies in the country. Many people use or are familiar with bitcoin (BTC), ether (ETH) or stable coins such as USDT. There are regulations, academies, and numerous companies related to the ecosystem. Everyone talks about cryptocurrencies in Venezuela, but is it a cryptocurrency?

This was the topic of a conference entitled “Venezuela: the next crypto-nation,” held at the. Caracas Blockchain Week.. The meeting was attended by specialists in the field, who discussed the factors involved in the increased adoption of cryptocurrencies in the country. and the challenges and obstacles that arise in the daily life of a cryptocurrency user.

Aarón Olmos, an economist and postgraduate professor at the IESA Institute, believes that people in Venezuela adopt cryptocurrencies “not out of obligation, but out of necessity.” The desire to have an alternative way of transferring digital value.

This necessity is a consequence of living in a failing economy.Olmos is convinced. “Many people in Venezuela would not have approached the subject of cryptoassets, would not have learned about trading, mining, finance or even legal issues if the bolivar had not been in the condition it was in,” he argues.

According to Luis Marín, CEO of the dissemination website Monitor Cripto, conditions such as hyperinflationas reported by CryptoNews, and the inability to pay for services and products from abroad has prompted citizens to seek alternatives to solve everyday problems. It also suggests that the concept of a crypto-nation defines a country that “allows citizens the freedom to access an economy somewhere between centralized and decentralized.”

Ezio Rojas (host) Luis Marin (Monitor Crypto), Aaron Olmos (economist and professor), Editza Oliveros (Q&A Consulting). Source: CryptoNews.

Marín argues that the example of El Salvador allows us to recognize how the law has politicized the use of Bitcoin. So, in this case, there is a trade-off between the use of cryptocurrencies By choice and use by compulsion.

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In this regard, he insists that the state knows it does not have the ability to prohibit the use of cryptocurrencies. Therefore, it must be “permissive and must create the regulatory tools.” He adds, “the difference between a crypto-nation and a state dictating a measure on cryptocurrencies lies in the actual adoption.” In this sense, the analyst concludes that Venezuela is a leader in the region.

Education and government incentives in a crypto-nation.

Olmos believes that in terms of citizens, “We have to go through a process of learning, self-education, self-knowledge, self-experimentation.”. And, in Venezuela, a scenario occurred in which the popularizers, “beyond the use of financial speculation and evidently away from the subject of fraud, make crypto-assets understood for what they are: a decentralized alternative means of payment, without the participation of governmental powers.”

For Editza Oliveros, of technology services and consulting firm Q&A Consulting, although Venezuela has an advanced regulatory framework, there is still a long way to go, especially in the tax area. “One of the experiences of El Salvador, precisely, is to ensure that these enrichments have a type of tax benefit.”

Venezuela has chosen a different path. “For example, we have the tax on large financial transactions, where all transactions made in Venezuela with crypto-assets or foreign currency have an additional payment of 3 percent. Despite the fact that the VAT law establishes in its body of law the possibility of taxing between 5 percent and 25 percent if you make payments with cryptocurrencies,” Oliveros explains.

The panelists agreed that the steps taken by Venezuelan society, in terms of adoption, were. driven by the special conditions of a sluggish economy.. In addition to deteriorating infrastructure, regulations that prevented people from accessing services and products that did not exist in the country, problems with cash, and foreign exchange controls.

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Cryptocurrencies came, at the time, to solve many problems,” Aarón Olmos concluded. However, even with growing adoption and a fairly well-defined regulatory framework, the panelists agreed that there is still a long way to go before Venezuela is considered a crypto-nation.

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