Thursday, November 30, 2023

Welcome to Latin America’s Crypto-Economy Overview, your one-stop digest for the most significant economic and cryptocurrency developments in Latin America during the past week. In this week’s edition, we delve into the impending liquidation of Venezuela’s petro, Ripple’s new alliance with the Colombian Central Bank, and Brazil’s recent legislation concerning cryptocurrencies.

Impending Dissolution of the Venezuelan Petro

The Venezuelan petro, one of the pioneering cryptocurrencies issued by a state and supported by tangible resources like oil and gold, is reportedly on the brink of liquidation. Bloomberg Linea, a Latin America-focused media platform, disclosed this based on statements from three individuals associated with Sunacrip, Venezuela’s cryptocurrency authority, who said the decision is final.

The Petro blockchain is slated to be discontinued after major petro holders, including department stores that accepted petro payments, have been refunded.

The potential liquidation of the Venezuelan petro follows Venezuelan President Nicolas Maduro’s decision to establish a new restructuring board for Sunacrip three months ago due to allegations of a $20 billion “Crypto-PDVSA” corruption scandal. Joselit Ramirez, the previous head of the organization, was arrested in connection to this plot.

In May, the petro encountered operational issues with its blockchain unexpectedly halting several times and numerous accounts reportedly being suspended after these instances.

Ripple Collaborating with the Central Bank of Colombia for Blockchain Technology Exploration

Cryptocurrency-focused firm Ripple has teamed up with the Central Bank of Colombia for a collaborative exploration and integration of its blockchain technology. This alliance forms part of the third round of blockchain exploration initiated by the Colombian Ministry of Information and Communications Technologies.

The Central Bank of Colombia will create prototype applications to assess the effectiveness of blockchain-based systems in the areas of payment technology and data management. As outlined in a press release, the Ripple Central Bank Digital Currency (CBDC) platform will undergo testing in a controlled environment that doesn’t risk public funds.

Earlier in July, the Colombian government disclosed plans for a Ripple-based framework to issue land registry certificates.

Brazil Enacts New Cryptocurrency Legislation

The Brazilian government has put forth a fresh cryptocurrency regulation, filling the gaps in the previously ratified cryptocurrency law. Signed by Brazilian President Luiz Inacio Lula Da Silva, Economy Minister Fernando Haddad, and Central Bank President Roberto Campos Neto, the new regulation designates the Central Bank of Brazil as the overseer of the country’s cryptocurrency industry.

The central bank will grant licenses to exchanges to operate within Brazil and will also retain oversight power over other cryptocurrency market activities. The securities regulator (CVM) will only hold jurisdiction over digital assets deemed as securities.

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Frequently Asked Questions (FAQs) about Latin America’s crypto-economy developments

What is happening with the Venezuelan Petro?

The Venezuelan Petro, a cryptocurrency issued by the government and backed by natural resources, is reportedly going to be liquidated. Major Petro holders, including department stores that accepted Petro payments, will be reimbursed and the Petro blockchain will then be discontinued.

What is the recent development involving Ripple and the Central Bank of Colombia?

Ripple, a company focused on cryptocurrency, has teamed up with the Central Bank of Colombia to research and implement blockchain technology. This partnership is part of the third phase of blockchain experimentation led by the Colombian Ministry of Information and Communications Technologies.

What is Brazil’s new cryptocurrency decree?

The Brazilian government has issued a new cryptocurrency decree that outlines the rules that were left out of the previously approved cryptocurrency law. This decree designates the Central Bank of Brazil as the regulator of the cryptocurrency industry in the market. It will authorize exchanges to operate in the country and also have supervisory power over other operations of the crypto market.

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