Venezuela to Collect Tax in Cryptocurrency - But No Petro?

Colin Muller

A decree issued yesterday by Nicolas Maduro’s government states that those conducting business in Venezuela involving either cryptocurrency or foreign fiat money must also pay taxes on that business using cryptocurrency or foreign fiat money, respectively.

Specifically, article one of the decree in question - number 3,719, of gazette number 6,420 - states that:

The taxpayers who carry out transactions [...] authorized by the Law [...] in foreign currency or cryptocurrency [...] which constitute taxable events generating national taxes, must determine and pay obligations in foreign currency or cryptocurrencies

Exceptions to this stipulation, according to article two, include an exemption for securities traded on the national stock market, and on the “export of goods and services, carried out by bodies or public entities.”

The plan to accept cryptos is not fleshed-out yet, however, and currently seems to be only an aspiration of this particular issue of the gazette. Article five describes that the country’s agency responsible for regulating banking, the SUBEDAN, will in future “dictate the regulatory norms of the adjustments that must be carried out by the institutions that make up the banking sector for the execution of this decree."

Which Crypto?

Notably, the decree does not mention which particular cryptoasset(s) are usable for paying taxes. There is no mention anywhere in the decree of the country’s national crypto, the Petro (PTR), a ERC-20 token issued on the Ethereum network.

CryptoGlobe recently reported on Venezuela’s stated intention to (eventually) conduct its hydrocarbon trade using only the Petro. This was a noteworthy decision because the US has sanctioned all use of PTR or any trade conducted using it.

Russian Deputy Finance Minister Sergei Storchak recently expressed uncertainty about conducting trade with Venezuela using the Petro, after Maduro traveled to Russia in an effort to foster non-US dollar dominated trade arrangements.

Russia is also subject to US and US-backed sanctions, and is also considering its own implementation of a national cryptocurrency to conduct Eurasian trade.

President Maduro is set to begin his second term of office tomorrow. Latin American politics are increasingly heading to the right, and the regional Lima Group has refused to recognize Maduro’s legitimacy to occupy his office.

Rwanda’s Central Bank Reportedly Considering Launcing Its Own Cryptocurrency

Michael LaVere
  • The National Bank of Rwanda is considering developing a digital currency. 
  • Planning to use Canada, Singapore and the Netherlands as model countries. 

The National Bank of Rwanda (NBR) is reportedly considering the development and launch of a state-backed cryptocurrency. 

Rwandan Digital Currency

According to a report by Bloomberg published on Aug. 22, the central bank is looking into the feasibility of launching a cryptocurrency that would make processing transactions more efficient in addition to boosting economic growth. 

The report claims that the NBR intends to learn from the experience of Canada, Singapore and the Netherlands--other countries that have tested the use of blockchain technology backing a central bank digital currency. 

Financial Stability Director-General Peace Masozera Uwase told Bloomberg in an interview, 

There are still concerns about how exactly you convert the entire currency into digital form, how to distribute that and how fast can you process those transactions. Challenges come in, if technology is down how do you deal with such issues? “We will join in once we are ready.

Rwanda’s consideration of a digital currency comes just weeks after it was reported that China’s central bank digital currency is set for launch, despite the country’s negative stance towards bitcoin and cryptoassets. 

However, the global attitude of central banks is gradually shifting towards the issuance of a digital currency, as existing financial systems seek to find ways to keep up with the fintech revolution being generated through crypto and blockchain.