Sudeban, Venezuela’s banking watchdog, is currently creating a mechanism to examine cryptocurrency-related transactions in real-time to maintain the influence they have on the stability of the international currency exchange market. Analysts have associated the recent drop in the bolivar’s worth to the current state of the crypto market P2P.
Venezuelan Government Taking Steps to Monitor Crypto Activity
The Venezuelan government is taking measures to safeguard the worth of the bolivar by keeping an eye on crypto-based P2P trading platforms. On December 20, Venezuelan banking regulator Sudeban described that the organization is creating a system to monitor banking transactions in real-time, utilizing the support of Sunacrip the national crypto regulator.
Whilst no more details were provided, the organization stated that the goal is “to combat irregular practices that threaten our currency and the stability of the exchange market.” This implies that the government is investigating the relationship between cryptocurrency markets and exchange rates between the US Dollar and the Venezuelan bolivar.
Although linkages have been made between the two variables, analysts have tied the recent crypto drought on peer-to-peer market due to the collapse in FTX to the sudden rise in the exchange rates. However, this could be combined with other causes such as the natural excess of fiat currencies on the market because of the holiday season.
According to the bank, this is related to over 75 bank accounts being blocked due to suspicious activity in relation to cryptocurrency transactions. Legalrocks, a national crypto-focused law firm, added that this is one of the “drastic” measures announced by President Nicolás Maduro on December 11 to deal with the devaluation of the bolivar, which has gone from 12.66 bolivars per dollar on November 28 to almost 20 bolivars per dollar on December 28.
Devaluation-Inflation Cocktail
This is the second period of high currency devaluation. The bolivar lost 40% of its value this year. Analysts are worried about the behavior of the exchange rates and they are presently examining the possible impacts on inflation rates this December and next year. The nation has recently emerged from a period of hyperinflation, which began in 2017 and lasted four years. José Guerra, a Venezuelan economist, forecasts an inflation rate of 30% for December. Since then, the government has not released official figures for inflation. Prices increased by 119.4% in the first 10 months of 2022.
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