In December, we reported when President Nicolás Maduro of Venezuela announced the intention of the government to launch a national cryptocurrency, ‘El Petro’, to mixed reception.
Now, his government has launched the Observatorio Blockchain, a registry for cryptocurrency miners. 860,811 young people have already signed up, according to Bitcoin.com.
Cryptocurrency is popular in the country. Heavily subsidised electricity costs make mining actually feasible to operate profitably, while chronic shortages of goods and a worthless national currency means that to many it is something of a lifeline, as it allows them to import food and medicine through e-commerce websites.
The Venezuelan government has not always been friendly to cryptocurrency. Back in March, the state-owned broadcaster Corporación Venezolana de Televisión branded Bitcoin users “subversive”.
In August, CNBC called Venezuela one of the most dangerous places to mine Bitcoin. Although it is technically legal there, police have been regularly arresting people for mining, usually after being alerted to the presence of mining equipment by the high electricity usage. Typical charges include electricity theft and fraud. According to The Atlantic, corrupt police often use confiscated mining equipment for themselves.
After one such raid in December, local police said in an official statement: “Digital currency is not endorsed by any banking institution in the world nor has it been approved by any country. The currency is being marketed with legal appearance but in essence it operates in secret,” according to Reason.com.
This hasn’t been strictly true for a while now, and the government of Maduro has changed its tune. According to RT, last week he announced on national television that El Petro will be backed by the Ayacucho oil field, which holds five billion barrels of oil. “Every single Petro will be backed by a barrel of oil,” he said. “We will set up a special team of cryptocurrency specialists so they will be engaged in mining in all states and municipalities of our country.”
This enlistment drive is to take place through the national registry of cryptocurrency miners. Carlos Vargas, Superintendent of Venezuelan Cryptocurrency, said: “We are building the Blockchain Observatory for the possibility of a registry for all those who are exercising digital mining in Venezuela. We want to know who they are, we want to know where they are, we want to know what equipment they are using. We want to move towards the regularization of digital mining in Venezuela,” according to Criptonoticias.
Said Maduro: “We are facing a financial war against the country which we have denounced, and the opposition has denied. There are business people who are unaffected by Donald Trump’s blockade. With this, we will join the 21st century.”