Venezuela’s Constituent Assembly Drafts Law to Create Central Bank for Crypto

A member of the Venezuelan National Constituent Assembly has reportedly revealed that the assembly is preparing a reform to the country’s Constitution that includes a central bank for cryptocurrencies. This follows the Venezuelan government’s latest effort to tie the new bolivar currency to the petro.

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Central Bank for Cryptocurrencies

Hermann Escarra, a member of Venezuela’s National Constituent Assembly, has revealed the assembly’s plan for cryptocurrencies in an interview with Reuters in Caracas on Thursday. He divulged:

The National Constituent Assembly of Venezuela…is preparing a reform to the Constitution that would include a central bank for crypto-assets and a superior court to the Supreme Court of Justice.

Reiterating that the central bank for crypto will be incorporated, he elaborated, “There will be the central bank with its functions in exchange, monetary and financial policy.” He also emphasized that, as part of the reform, “a court will be created that will be above the supreme court.”

Hermann Escarra in an interview with Reuters. Photo credit: Reuters.

Escarra, described by Reuters as “one of the most influential members of the assembly that prepares the changes to the 1999 constitution,” said that “the draft changes to the Constitution will be presented in 35 days to the board of the Constituent Assembly.”

In May last year, Maduro called for a constituent assembly to draft a new Venezuela Constitution to replace the 1999 Constitution of his predecessor, Hugo Chávez. The Constituent Assembly elections were held on July 30 last year. However, “The assembly was controversial from the start, with opposition activists denouncing it as unconstitutional while its supporters argued it would bring peace to the polarised South American nation,” the BBC detailed.

Escarra further elaborated:

The reform is expected to include the petro, a cryptocurrency announced by the government of President Nicolás Maduro in February as a way to increase its foreign exchange earnings, in the midst of the economic crisis and the sanctions imposed by the United States.

Venezuela’s ‘Crypto’ Efforts

Earlier this year, the Venezuelan government launched a digital currency called the petro which Maduro claimed to be a cryptocurrency backed by the country’s oil reserves.

However, the petro is met with much controversy since all claims regarding this digital currency, including how much money it has raised, are not backed by any proof. In addition, “Cryptocurrency experts have said the petro suffers from a lack of credibility because of a lack of confidence in Maduro’s government and the mismanagement of the country’s existing national currency,” Reuters described.

In June, the Maduro government dismissed the country’s Superintendent of Cryptocurrencies, Carlos Vargas, who was in charge of promoting and selling the petro. He was replaced by Joselit Ramírez. Economist Víctor Álvare told El Nacional publication that “The measure is due to the fact that Superintendent Carlos Vargas failed to sell the cryptocurrency.” He detailed:

The measure is a revelation that the objectives, goals and expectations of obtaining 5 billion dollars from the petro were not met, a matter that practically disappeared from the official discourse.

On July 25, Maduro announced that the country’s new currency, the Sovereign Bolivar (Bolivar Soberano), will be linked to the petro. The new bolivar is scheduled to be released on August 20, as news.Bitcoin.com previously reported.

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Images courtesy of Shutterstock and Reuters.

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