In an effort to circumnavigate the sanctions that block Venezuela trading with the outside world the Venezuelan National Army have released details of the opening of the country’s first Bitcoin Mining farm.
Unblockable sources of income
The “Digital Assets Production Center of the Bolivarian Army of Venezuela” sprang into life on November 19th in an effort to generate Bitcoin and produce “unblockable sources of income”. The facility which houses ASIC mining equipment is set to exclusively mine Bitcoin and was opened by the 61st Agustín Codazzi Engineer Conditioning Brigade. Its aim is to achieve self sustainability and become an alternative to the “trust system blocked and controlled by colonialist interests” which many people believe to be a reference to the current US led sanctions on the South American country. The Mining farm has the support of the national crypto regulator Sunacrip.
Venezuela is the 3rd largest user of cryptocurrency in the world – a result of the popularity of Bitcoin and other cryptocurrency in an effort to combat the devaluation of the Bolivar following international sanctions. The use of crypto is fully supported by Venezuelan president Nicholas Maduro who recently said “Donald Trump and his sanctions are blocking Venezuela from carrying out transactions in any of the world’s banks. There are other formulas to pay, and it’s what we’re using because our payment system works perfectly in China and Russia.”
Growing crypto utility
In another sign of the growing utility of crypto currency and digital assets President Maduro went on to say “The finance minister and Venezuela’s central bank have new instruments which we will activate very soon so that everyone can do banking transactions, as well as national and international payments through the central bank’s accounts.”
The development of the global FinTech industry has led to the emergence of new ways to bank, invest and send money abroad. Through innovative use of distributed ledger protocol and trustless systems users are now able to send money digitally within seconds circumventing traditional financial methods involving nostro vostro accounts, settlement and arbitration. In a post Covid, fairer and more connected world this financial innovation is leading to large swathes of investment in this burgeoning area of finance.