Venezuelan Banking Watchdog to Oversee Crypto Transactions to Preserve Currency Stability – In an effort to preserve the value of the bolivar, the Venezuelan government intends to oversee crypto-based peer-to-peer trading. The Venezuelan banking watchdog Sudeban revealed that it is in the process of establishing a system to monitor banking transactions in real-time, with the assistance of the national cryptocurrency regulator Sunacrip.
While no more details were offered, the organization explained the objective is to “fight the irregular practices that attack our currency and the stability of the exchange market.” This means that the government looks to be examining the link between the volumes exchanged in cryptocurrency markets and the U.S. dollar – Venezuelan bolivar exchange rate.
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While the government has not stated explicitly there is a direct relation between these two variables, analysts have linked the recent cryptocurrency drought in peer-to-peer markets due to the collapse of FTX, to the sudden rise in the aforementioned exchange rate. However, this is also attributed to other factors, such as the natural availability of fiat currency on the market as a result of holiday-related spending.
Since the end of 2021, according to Legalrocks, a national crypto-focused law company, more than 75 bank accounts have been blocked owing to suspicious activity relating to cryptocurrency transactions in relation to this policy.
This would be one of the “drastic” measures announced by President Nicolas Maduro on December 11 to combat the devaluation of the bolivar, which has increased from 12.66 bolivars per dollar on November 28 to nearly 20 bolivars per dollar on December 28. This followed a period of severe devaluation in November, during which the bolivar lost 40% of its value.
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The behavior of the currency rate has alarmed economists, who are studying the potential effects this may have on inflation rates in December and beyond. The country has recently emerged from a hyperinflationary period that began in 2017 and lasted four years. Venezuelan economist Jose Guerra forecasts a 30% inflation rate for December. The Central Bank of Venezuela has not released official inflation numbers since October, registering an increase of 119.4% in prices during the first 10 months of 2022.
