News coming out of Venezuela indicate that the government is now supporting Bitcoin, and Litecoin payments. This will happen through the launch of a government-backed crypto-currency remittance platform known as the “Remesas” platform.
This platform will allow users to send Litecoin (LTC) and Bitcoin (BTC). This will be the first time that a government has launched a crypto service that will enable the execution of normal remittances. The Venezuelan government had made attempts to launch a national crypto known as the “petro” earlier only to end up facing a myriad of hurdles. These hurdles had to do with questions over its legitimacy; and the fact that US legislators were already sharpening their pencils, in preparation to legislate against it.
The “Remesas” platform, a new service from the country’s Patria Platform, is designed to guarantee financial inclusion along with the social protection of the people of Venezuela. The people of Venezuela are quite vulnerable at the moment, with all sorts of financial and social ills staring them right in the face. The country is currently embroiled in a financial crisis, and a humanitarian crisis, that was sparked by political animosity within the US.
The country is having a tough time occasioned by biting US sanctions, violent protests, hyperinflation, and economic collapse. A lot of this mess has also been brewed by an ugly domestic political scene with warring political factions headed by embattled president Nicholas Maduro and opposition leader Juan Guaido as Venezuela’s self-proclaimed interim president.
This newly launched Bitcoin and Litecoin remittance platform is another attempt by under fire president Nicholas Maduro to beat US sanctions and silence the opposition. The Remesas platform which is run by Patria, is controlled by the country’s superitendancy of crypto-assets, and related activities; (Sunacrip), which also happens to be the country’s crypto regulator.
According to Patria;
“Remesas is a service of the Patria Platform that allows you to send remittances to Venezuela in crypto-currencies. The resources sent will be available in sovereign bolívars in the Monedero Patria as soon as the transfer is confirmed.”
This service will have a fluctuating commission which will be updated daily, with the service being disabled at any time “depending on the availability of funds and Bolivars”
Just last month, the country introduced fresh crypto regulations which impose up to 15% remittance fees on cryptos. The new rules outline the remittance process as follows;
“The remittance is made in four simple steps (1) record of the data of the person who remits it; (2) define the crypto-currency to use and agree to the amount to send; (3) then an address will be shown to make the transfer; and finally (4) the identifier (hash) of the operation will be placed. When confirming the operation, the recipient or recipient will be notified through a text message.”
There is also a maximum on the amounts that one can receive monthly due to remittances, necessitating additional attention on the amounts to be transferred, which must coincide with amounts agreed in the second step of the remittance process.
Venezuela’s central bank could play a pivotal role in determining crypto prices on the platform. Since the platform will apply the official central bank rate while also applying commissions that can range from the equivalent of 0.25 Euros to 15% of the amount in Bolivars.
As the political and financial situation simmers in Venezuela, locals are increasing using crypto-currencies to combat the collapse of their local currency. Trading of Bolivars on LocalBitcoins has hit an all-time high as locals opt for decentralized platforms that aren’t in government control.
It’s a waiting game now really; a waiting game that questions whether Nicholas Maduro can hold on to power, and whether his crypto-currency damage control measures will stick.