Venezuelans reportedly hit by new Bitcoin tax of up to 20%

February 7, 2022 Coin Telegraph

Bitcoin adoption has been on the rise in Venezuela in recent years amid hyperinflation and the national currency crisis.

The Venezuelan government has approved a new tax bill aiming to collect up to 20% in taxes from cryptocurrency transactions, according to local reports.

Venezuela’s National Assembly held the second discussion session on Thursday for a new draft bill targeting taxes on “large financial transactions” in cryptocurrencies like Bitcoin (BTC).

The Venezuelan government reportedly approved the draft bill last Thursday, requiring local firms and individuals to pay up to 20% for operations carried out in cryptocurrencies as well as foreign currencies like the U.S. dollar.

Filed on Jan. 20, the draft law aims to collect from 2% to 20% over transactions in any currencies other than those issued by the Republic Bolivarian Republic of Venezuela, or the Venezuelan bolivar and the country’s oil-backed cryptocurrency, El Petro.

The initiative aims to incentivize the use of the national currency, which reportedly lost over 70% in value last year alone and shed nearly all its value over the past decade.

“It is necessary to guarantee treatment at least equal to, or more favorable, to payments and transactions made in the national currency or in cryptocurrencies or crypto assets issued by the Bolivarian Republic of Venezuela versus payments made in foreign currency,” the bill reads.

As previously reported by Cointelegraph, Bitcoin adoption has been skyrocketing in Venezuela in recent years, with many thousands of local businesses starting moving into cryptocurrency to survive amid hyperinflation. In October 2021, a major international airport in Venezuela was preparing to start accepting cryptocurrencies like BTC as payment for tickets and other services.

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Coin Telegraph

“We must advance in these new economic and technological systems to be accessible,” Maiquetia airport director said.

A major international airport in Venezuela is reportedly preparing to start accepting cryptocurrencies like Bitcoin (BTC) as payment for tickets and other services.

Simón Bolívar International Airport is working to enable cryptocurrency payments to comply with local industry standards, regional news agency El Siglo reported on Sunday. Also known as Maiquetia, the airport is located in downtown Caracas, the capital of Venezuela.

According to Maiquetia airport director Freddy Borges, the airport plans to accept many cryptocurrencies, including Bitcoin, Dash and Venezuela’s oil-pegged digital currency, the Petro. He said that the airport’s administration would introduce new payment options in coordination with Venezuela’s National Superintendence of Crypto Assets and Related Activities.

The introduction of crypto payments at the Maiquetia airport would mark the company’s commitment to advance toward international standards and drive digital currency adoption, Borges noted. According to the executive, the crypto payment option would benefit foreign tourists, including those from Russia.

“We must advance in these new economic and technological systems to be accessible,” Borges reportedly stated.

The news comes amid Venezuela experimenting with a central bank digital currency (CBDC), with the country’s central bank launching the digital Venezuelan bolivar on Oct. 1. Unlike a CBDC, which is pegged to Venezuela’s national currency, the Petro is an oil-backed cryptocurrency launched by the government in February 2018.

Several airports and airlines around the world have been exploring ways to introduce crypto payments and blockchain-based functionalities in recent years, providing better options for cash payments and improving customer verification services, including COVID-19 test results. In March, Latvian airline airBaltic started accepting Ether (ETH) and Dogecoin (DOGE) as payments for tickets after rolling out crypto payments back in 2014.

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Venezuela to launch CBDC in October — and cut six zeros from its currency

August 6, 2021 Coin Telegraph

CBDC

The Central Bank of Venezuela is rolling out a CBDC in October and will launch an SMS-based exchange system to facilitate its use.

The Central Bank of Venezuela will launch a CBDC in October alongside a monetary redenomination that will cut six zeros from the currency due to raging inflation.

As of Oct. 1, the digital bolivar will begin circulation in the economy. Its cash equivalent will get a new 1-bolivar coin, along with banknotes ranging from 5 Bs. to 100 Bs. as part of the six zero readjustment of the currency,

The Central Bank of Venezuela made the announcement on Aug. 6. The CBDC will be accompanied by an SMS-based exchange system to facilitate payments and transfers between its users. The bank claimed that the CBDC and redenomination of the currency will have no effect on the bolivar’s value and that the overhaul is part of a move to simplify the use of the currency.

"The bolivar will not be worth any more or any less, in order to facilitate its use, it is being taken to a simpler monetary scale," the central bank said.

COMUNICADO OFICIAL| A partir del 1° de octubre entra en vigencia el Bolívar Digital
#BCV https://t.co/635uhVu1sA pic.twitter.com/aErAOUvwHL
— Banco Central de Venezuela (@BCV_ORG_VE) August 5, 2021

Venezuela’s President Nicolas Maduro first teased the idea of a digital bolivar back in February, as he outlined the issuance of CBDC as one of the actions the government was taking to modernize and rebuild the economy.

The president is no stranger to state-issued digital currencies, having launched the oil-pegged Petro coin in 2018 as a tool to circumvent U.S. sanctions.

This the second time in three years that Venezuela has readjusted the bolivar after Maduro cut five zeros from the currency in 2018 as inflation hit its peak of 1.8 million percent. In 2020, the annual inflation rate was estimated to be around 2,300%.

Luis Vicente Leon, economist and president of Caracas-based Datanalisis, criticized the move, telling Bloomberg on Aug. 5 that another redenomination of the currency will do nothing to address the underlying issues that are debasing its value:

“Removing those zeros does not solve, at all, the reason that originated the problem. Without resolving the root of the issue, we will have the same problem in months.”

Venezuela has been dealing with a long-running economic crisis as the economy suffers from U.S. sanctions and hyperinflation. In September 2020, Maduro proposed an anti-sanctions bill that sought to use crypto as a tool to evade the sanctions imposed on the country.

Petro