Venezuela Imposes Exorbitant Fees on Bitcoin Remittances

By Swati Kishore

Venezuela is continuing to make records with the trading volume of Bitcoin touching new heights every week. Amidst the record volumes, the Venezuelan government has formed regulations that require fees to be paid on remittance made in Bitcoin.

While the Bitcoin trading volume for last to last week was 2,004 Bitcoin, the week ending on February 9, 2019, surpassed this volume and saw the highest ever trading volumes recorded in the nation.

Data from Bitcoin services website, Coin Dance, reveals that the citizens of Venezuela traded as much as 2,454 Bitcoin on the peer to peer trading platform, Localbitcoins for the week ending February 9, 2019.

In terms of Venezuela’s troubled fiat currency, VES, 24 billion worth of Bitcoin were transacted during the week ending February 9, 2019, which is a whopping 41 per cent increase from last to last week.

The ongoing unrest in the Latin American nation has resulted in the citizens’ dependence on Bitcoin to meet their daily needs. The persisting political standoff stands to worsen the issues of hyperinflation and forex shortage.

The record touching levels of Bitcoin volumes have led to the government officials implementing excessive fees on digital currency-related remittance payments.

As per the notice published on February 7, 2019, on the Official Gazette, the cryptocurrency-based remittances in Venezuela comes under the ambit of the Cryptoactives and Related Activities of Venezuela (SUNACRIP). The SUNACRIP sets limits on crypto payments. The decree published reads as follows,

“The ruling defines commissions that range from 0.25 euros ($0.28) as the minimum rate per transaction, to 15% of the funds transferred in cryptocurrencies [sic]. In addition, it limits the sending of remittances to a monthly amount equivalent to 10 Petros (PTR), a cryptocurrency [sic] created by the Venezuelan Government.”

As per the notice, the upper limit for the crypto payments is pegged at USD 3,000.

Crypto commentators have responded negatively to the news since the imposition of a fee on crypto-based remittance is the antithesis of what digital currencies sought out to do- removal of fees charged by intermediaries on international transactions.