You know it serious when the Army gets involved. Time and again, the Venezuelan economy has suffered significant economic hits, mainly after inflation in oil prices. This is brought about by political instability and, most recently, the COVID-19 pandemic.
In September 2020, Maduro had, therefore, proposed an ‘Ati-Block law,’ a legal body that allows cryptocurrency to go around sanctions and, therefore, open the door to enable financial aid from international friends. This route was previously attempted when the Maduro Administration tried to unveil its cryptocurrency called the ‘PETRO.’
On August 20th, 2018, the Venezuelan government released a new form of currency called the’ New Bolivar,’ which was linked to the Petro to curb the impending economic crisis and inflation. (The Petro is exchanged at the rate of $60 for every Petro). However, this new currency was not as successful as expected.
For this reason, the Venezuelan Army has leaned more into cryptocurrency in recent days to help alleviate the stress brought by a collapse in their economy. This shift is understandable given the recent spike in bitcoin worth.
Through an Instagram video, the Engineering Brigade of the Venezuelan Army launched the” Digital assets Production Center of the Bolivarian Army of Venezuela,” which houses various ASIC mining equipment that will give algorithms that show proof-of-work.
According to the general Lenin Herrera, the mining operation’s primary goal is” strengthening and self-sustainability of units of the Bolivian Army by generating un-block able sources of income which is an alternative to the trust system blocked and controlled by colonialist interests.” When he spoke, the general referred to the United States of America, who have continually sanctioned against the Maduro regime and his many associates. These sanctions have limited Venezuela’s ability to purchase food and import necessary products from countries like the US, leading to an estimated $11billion loss in 2019 alone.
Therefore, it might not be as simple for the Venezuelan government to trade with American allies because the US military is on high alert. The US Admiral Craig Stephen Faller recently said that he has evidence that links drug trafficking and terrorism to the use of cryptocurrency. For this reason, the US continually sanctions Venezuela as a way to prevent criminal activities and human rights abuse that would otherwise be funded by activities such as illegal gold mining, state-operated oil harvesting, and drug trafficking.
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