Venezuelan Banking Watchdog to Oversee Crypto Transactions to Preserve Currency Stability – Economics Bitcoin News
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Sudeban, Venezuela’s banking regulator, is currently working on a mechanism to review crypto transactions in real time to manage their impact on currency market stability. Analysts have recently linked the situation in the peer-to-peer (P2P) market to the recent decline in the value of the Bolivar.
The Venezuelan government controls crypto transactions
The Venezuelan government seeks to control the movements of crypto-based P2P exchanges to protect the value of the Bolivar. On December 20, Sudeban, the Venezuelan banking watchdog explained that it is currently designing a system for real-time monitoring of bank transactions with the help of Sunacrip, the national cryptocurrency regulator.
While no further details were offered, the organization explained that the goal is to “fight irregular practices that attack our currency and the stability of foreign exchange markets.” This means that the government appears to be investigating the connection between the volumes traded in the cryptocurrency market and the exchange rate between the US dollar and the Venezuelan Bolivar.
Although the government has not specifically stated a direct link between the two variables, analysts have linked the recent peer-to-peer cryptocurrency drought due to the collapse of FTX to the sudden rise in the aforementioned exchange rate. However, this is said to be mixed with other reasons as well, such as the natural abundance of fiat currency in the market due to holiday payments.
Related to this move, more than 75 bank accounts have been blocked for suspicious activity related to cryptocurrency transactions since the end of 2021, according to Legalrocks, a national cryptocurrency law firm.
Devaluation and inflation cocktail
This would be one of the “drastic” measures announced by President Nicolas Maduro on Dec. 11 to curb the devaluation of the bolivar, which has risen from 12.66 bolivars to the dollar on Nov. 28 to nearly 20 bolivars to the dollar in December. 28. This follows another high devaluation period in November, when the bolivar lost 40 percent of its value.
The behavior of the exchange rate has worried analysts, who are now investigating its possible effects on the inflation rate in December and next year. The country recently emerged from hyperinflation that began in 2017 and lasted for four years. Venezuelan economist Jose Guerra predicts 30 percent inflation for December. Venezuela’s central bank has not released official inflation figures since October, and prices have risen 119.4% in the first 10 months of 2022.
What do you think about the idea of monitoring cryptocurrency banking transactions in Venezuela? Let us know in the comments section below.
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