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.

Details Emerge on Iran’s XLM-Based Gold-Backed Cryptocurrency

Iran’s new gold-backed cryptocurrency “PayMon” will be technically based on the Stellar Lumens (XLM) network (which is an open-source codebase), and will trade in “special exchange offices.” These details emerged during a Sputnik interview with Hamid Reza Shaabani, founder of Iranian blockchain company ArzDigital.

As CryptoGlobe reported earlier this month, a company called Ghoghnoos (ققنوس - “phoenix” or “gryphon”in Persian) and four national banks are cooperating with Iranian authorities to produce the PayMon system.

The principal aim of PayMon is to provide a way for Iran to trade around US-sponsored sanctions, which have been increasing under Donald Trump’s push to scuttle (and renegotiate) the Obama-era “Iran deal.”

Commenting on the potential fulfilment of gold for tokens, Shaabani said that the “contract with [Ghoghnoos] stipulates that token holders can receive gold, but the details are not clear yet.” He also said that the crypto will be mostly traded by “special exchange offices,” adding that “It's likely that currencies will be traded in major international currency exchange points.”

Golden Ticket

Iran has been seeking to increase its internal mining production of gold and other precious metals such as copper, in the wake of sanctions which partially targeted these items. Gold has been used in past years to get around sanctions, specifically those that predated the Iran Deal. Gold has helped Iran funnel billions of dollars around sanctions, via Turkey and Turkish nationals.

It is little wonder then that the Central Asian country has eventually thawed to the idea of a cryptocurrency, which is capable of transferring value with uncensorable impunity depending on how it is designed.

Iran joins the Venezuelan government among countries to adopt a state-backed crypto, with Russia also playing with the idea - all for the same general purpose of skirting US-backed sanctions.

Also in the realm of centralized, non-public stablecoins, the JPMorgan Chase mega-bank launched its own a few days ago. The coin will not be widely available, with only entities vetted by the bank having access to the private crypto.