Why has the Venezuelan military turned to bitcoin mining? 

Why has the Venezuelan military turned to bitcoin mining? 

  • 3 December 2020
  • 319 View

The Venezuelan military is mining crypto to help with the country’s dire economic situation. This shows that the regime relies on cryptocurrencies to survive.

Based on a social media report, the Venezuelan army has set up a “Venezuelan Digital Asset Production Center.” In the video, a large number of ASIC devices for mining coins can be seen.

What was the purpose of setting up a bitcoin mining center?

General Lenin Herrera has announced the launch of the mining center. He said the goal of the center is “enhancing and self-sufficiency of army units”. He added that such mining farms allow “non-blocking” revenue. Herrera called the new method an “alternative” to income generation. He noted that governments can not control these systems, so we use this method to counter financial sanctions.

Falling oil prices and political challenges the country have caused the country many problems. At the same time, the outbreak of the Coronavirus has doubled the issues. The anti-blockade law was passed in September. The law proposes ways to counter sanctions and give the country access to financial resources.

The US military, meanwhile, is closely monitoring the country’s crypto activities. US Admiral Craig Stephen Faller raised a concern. He said in a statement that Venezuela’s digital currency activities were linked to terrorism and drug trafficking. He added that he is closely monitoring them.

Is mining legal in Venezuela?

Due to the economic and political crisis, people are looking for ways to act outside the system only to buy goods and services. They have to participate in the black market, where they can make more money than having a regular salary. Accepting digital currency such as Bitcoin (BTC) over the bolivar is just another survival policy.

Based on reports, the country has recently approved crypto mining. The government ruled Miners to attach the National Mining Pool.

We recently saw the introduction of Venezuela’s cryptocurrency. The petro or Petromoneda launched in winter 2018. The government issued this crypto of Venezuela, but so far it has not had much success.

Can crypto save the country’s economy?

The Los Angeles Times reported the International Monetary Fund (IMF) has stated that the country has faced high inflation rates in recent years. The country has failed to meet its economic needs with its policies.

Bitcoin mining is currently a growing part of their hidden activities. So they use it to escape the very adverse effects of economic paralysis, political crisis, and rising inflation.

A local mining advisor said: “Because the Bolivar, their national currency, has fallen sharply. Anyone who buys bitcoins with Bolivar can benefit from rising the price of BTC against the dollar. Also, this can solve inflation.”

While Bitcoin mining is legal in the country, there is no law on crypto. Police even arrested some people who try to mine crypto coins for stealing energy.

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