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Fair Pricing is going to be allotted for Bitcoin Miners in Venezuela

In a country with cheap electricity compared to free, what does the government mean by “fair pricing”

In few words

  • The ministry of electricity and the crypto regulatory body of Venezuela has created a legal agreement.
  • This agreement will create a new electricity tariff for crypto miners, affecting the licensing process.
  • The changes are yet to be announced, and it’s skeptical that the rates will go down.

In September 2020, Venezuela directed all the Bitcoin miners and other Cryptocurrency miners to join a national pool. All earnings are regulated by the state and will be split among the miners.

Why does Venezuela want to change the electricity rate now?

The regulatory body for Cryptocurrency: Venezuela’s National Superintendence of Crypto Assets and Related Activities (SUNACRIP) and the Ministry of the People’s Power for Electric Energy, which is responsible for public electricity policy, has signed a legal contract to endorse and establish more crypto mining activities in the nation.

Nestor Reverol posted an official statement on his Instagram account saying that President Nicolas Maduro has instructed them to sign the Inter-institutional Cooperation Framework Agreement to endure with the solidification of state policies that allow the expansion of digital crypto mining and the conservation of the electricity supply in Venezuela, Nestor Reverol said they would establish fair prices for the industrial mining sector, which will allow the growth and development of service provision.

None of the authorities gave the word on what is precisely in that document. So we do not know prices will go down (to attract more miners to the industry), or it will go up (to citation some wealth from a resource-intensive subdivision).
What do we know? The ministers’ comments state that the contract would adapt electricity tariffs according to the miners and change the process to get a license for mining.

Venezuela’s government has regulated Bitcoin mining, and it is far advance than most of the countries.

  • Miners have to register in an official census.
  • Crypto mining is officially taxed in the country.
  • Miners are obliged by law to join a national pool organized by the state.

These regulations are in place, but there are ongoing confusion and conflicts among law enforcement and other government bodies about the standing of crypto mining. The new order is partially going to clarify things. Theoretically, the idea of ordering and promoting mining activity sounds pretty good. But assumption on what the new law will enable is in discussion on social networks and crypto circles.

The rate would be “attractive” SUNACRIP head Joselit Ramirez has assured Venezuelans that this can be a sign of relief for those involved in Cryptocurrency mining activities. It can promote a better situation for miners and can also indicate towards a purpose of low tariffs.

Carlos Díaz, an independent miner (those not registered with the government) living in Puerto Ordaz, is concerned about the law.

Diaz gave an interview and said that the government talks about creating a fair price for electricity, but in Venezuela, where energy is as good as free, this may be a method of saying that they will raise rates. He says this is Venezuela, where anything can happen, noting the government has a habit of ordering forced price reductions on products and services.

The licensing process will go under a modification, which will happen because the government is trying to avoid overloading the electrical grids in residential areas. But Juan Blanco, CEO of BitData, thinks on different terms. In an interview, he said, “The miners aren’t to blame. Instead, lack of state investment in infrastructure and support of businesses has altered the economic landscape.” He continued, “Many companies have closed down here,” he said, “and the miners have taken advantage of this availability of electricity.”

Localbitcoins has raked Venezuela the second-highest in trading volume. Venezuela also leads the world in terms of the adoption of cryptocurrencies, according to experts.

Disclaimer

The ideas and views expressed here are merely those of the author and do not necessarily reflect the opinions of Blockchain TradeIn. Moreover, every investment and trading option involves risk; you should conduct your research when deciding.