The Venezuelan government has announced a ban on Bitcoin mining and the seizure of 11,000 special-purpose integrated circuits used to mine the cryptocurrency.
The statement also said the government has disconnected a number of Bitcoin mines with the aim of “isolating all crypto mining farms in the country from the electricity system to avoid a significant impact on demand,” Bitcoin.com said. Reported.
The announcement came after 2,000 Bitcoin mining equipment was seized in Maracay City, Cointelegraph reported.
Bitcoin requires a lot of electricity, which drains the power grid. As a result, some oil-rich countries such as Kazakhstan have become global Bitcoin mining hubs. However, governments have begun cracking down on the practice, most notably in China, where Bitcoin mining and trading was banned in 2021.
Although Venezuela is rich in oil resources, years of U.S. sanctions and mismanagement have made it difficult to maintain a stable electricity supply. Power outages are frequent in Venezuela, which is even more of a problem for Bitcoin than in other countries where power outages are common.
But at the same time, the country's government is very friendly towards cryptocurrencies, with state-owned PDVSA using cryptocurrencies for international oil transactions to avoid sanctions by Washington. Last year, the use of cryptocurrencies was at the center of a PDVSA corruption investigation involving about $21 billion in unaccounted funds, Reuters noted in a recent report on the Venezuelan government's plans to step up its use of digital currencies.
Some reports on Caracas' crackdown on Bitcoin say it is part of the former chief's ongoing anti-corruption efforts.
In 2018, Venezuela introduced its own official cryptocurrency, Petro, which is backed by gold and used for international transactions. But since then, the Petro has disappeared from the headlines and potential usage, replaced by a digital currency called USDT. This cryptocurrency, also known as Tether, is pegged to the US dollar.
Written by Charles Kennedy, Oilprice.com
Other top articles on Oilprice.com:
