The cheapest country for bitcoin mining, Venezuela, has banned the import of mining hardware to curb the mining industry prevalent in its crypto space. It has also put a ban on few graphics cards and ASIC miners to swipe away the mining operations completely.
On the one hand, the country has launched oil-backed crypto named Petro but does not want its citizens to produce further digital currencies. The country is currently facing hyperinflation that has created an extreme food shortage and civil unrest among its citizens. It is said that the drastic fall in oil prices crumbled the economy in the worst way possible. In order to uplift its economy, the government will be eliminating last three zeros from the currency from June 4. The move is expected to bring some much needed relief to the hyperinflation here.
Most of the Venezuelans have invested in digital currencies to store their currencies value and hence their savings. It kick-started a phase of crypto mining as drinking a cup of coffee became as expensive as paying utility bills. As of now, BTC is valued at $530 is the cheapest in the world. Venezuela has become a hub for bitcoin mining as citizens try to survive another day.
In April, the government issued a circular that banned mining equipment to stop its people from boycotting the state-owned currency. Since then, Customs authorities have started a nationwide crackdown on the hardware used in crypto mining.
Adapting the new regulations, shipping companies like DHL and Liberty Express has updated its policies to inform customers about the new restrictions. They have also sent notifications to be on a safe side. Related Venezuelan Activities and Superintendence of Cryptoactives will be meeting with the National Association of Cryptocurrencies to establish a limit to the ban.
Carlos Vargas, the Superintendent, stated in April, “We are in an evaluation process to select and authorize companies that are qualified to import and market digital mining equipment and be responsible for the respective guarantees in our country.”
He also warned people to be cautious of mining operations and equipment as the regulators have not approved them.
Venezuela is in a situation where it is desperate to try any measure of recovering from the worst economic crisis ever. Once a happy and developing country has now become ruins of its own success. The cost of living is enough to disappoint its citizens who see digital currencies as the only solution.
On the other hand, the country has asked its oil customers to pay in Petro to decrease its dependence on the traditional currency. Some experts have not been in favor of investing in an oil-based currency as it might be more volatile than others.
If crypto miners in the country lose their last hope, the country might get into deeper troubles. It can be treated as the economic turbulence of Greece, but as there is no EU to solve the issues, Venezuela would have to take extreme measures. We can only wait for the impact the ban has on the overall health of the inflation struck country.
