It’s official: Venezuela had its government legalize the mining industry. This was made clear by CryptoNoticias, a local crypto news site that reported about it on Tuesday. However, while the government department regulating crypto did give it the green light, some hefty terms and conditions apply to it.
Regulating (And Legalizing) Crypto Mining
On Monday, the Official Gazette had published this new decree, which was authorized by the Head of National Superintendency of Crypto Assets And Related Activities (SUNACRIP), Joselit Ramirez. This decree stipulates that any local entity that wants to partake in crypto mining needs to apply for the relevant license, and will be listed on a government register, in turn.
Those that apply are mandated to hand over an array of information to the authorities. This includes the nature of their mining activities, as well as being mandated to keep records of their mining-related activities. They need to keep these records for 10 years, according to the new legislation.
All Equipment Regulated, Everything In One Pool
Venezuela authorities will now take part in both the manufacturing and import of mining equipment, as well. The authorities will be directly supervising both of these industries, with licenses needed for the manufacturing of mining equipment or mining data centers, as the report stipulates.
All mining activities have been mandated to be carried out through a National Digital Mining Pool. Those that decided to do their business outside of this mining pool will face penalties. This, of course, has a lot of problems for the individual miner. Through bundling all the mining activities into a single mining pool, the government is capable of controlling all the income earned through the combined mining rewards of the pool. Alongside this, it will be up to the Venezuelan authorities to pay out the contributors to this pool.
Tough Times For Venezuala
This means that the Venezuelan government could decide to delay or even freeze the payments of a miner, or otherwise impose any taxes before the payments have even been made. It’s a cheeky tactic, one you can’t help but respect, even if it’s so underhanded.
Through a combination of US-led national sanctions and general economic mismanagement, Venezuela’s economy has seen some very rough times. In the past, the country tried to use cryptocurrency to solve this issue, creating the first alleged central bank digital currency (CBDC): The Petro. However, there’s a lot of doubt and speculation regarding this coin, and no real proof has shown that it’s backed by oil reserves, as it was said it was.