The banking watchdog in Venezuela, Sudeban, is currently working on developing a mechanism that will enable it to monitor crypto transactions in real time.
This will allow it to have control over the influence of crypto-related transactions on the exchange market’s stability.
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This is due to the fact that analysts recently asserted that the drop in the value of the Venezuelan bolivar recently was due to the situation in the crypto markets.
Monitoring crypto transactions
In order to protect the value of the country’s national fiat, the Venezuelan government has decided to keep track of the crypto movements on peer-to-peer (P2P) exchanges in the country.
Sudeban, the banking watchdog in Venezuela, explained on December 20th that it is working on developing a system that can be used for real-time monitoring of banking transactions.
It elaborated that the national crypto regulator of Venezuela, Sunacrip, was also working with it. The organization did not provide any more details.
However, it did elaborate that their goal was to combat irregular practices that were attacking the country’s national currency and destabilizing the exchange market.
This essentially means that the Venezuelan government will examine the connection between the trading volumes of the US dollar and the Venezuelan bolivar exchange rate and the crypto markets.
The Venezuelan government has not explicitly stated that there is a link between the exchange rate and the crypto markets.
However, analysts have asserted that the exchange rate between the Venezuelan bolivar and the US dollar has risen because of the recent drought in the crypto space due to the implosion of the FTX crypto exchange.
But, they have also added that there are some other causes as well, such as the fact that the national fiat is more abundant in the market currently because of payments related to the holiday season.
In accordance with its measure to monitor crypto-related transactions via banks, a national law firm focused on crypto, LegalRocks disclosed that 75 accounts have already been blocked.
These accounts had suspicious activity related to crypto at the end of last year.
Inflation and devaluation
On December 11th, President Nicolas Maduro of Venezuela announced that they would take ‘drastic’ measures for dealing with the exchange rate problem and this appears to be one of them.
The bolivar has devalued rather rapidly, as, on November 28th, it was 12.66 bolivars per dollar, but a month later, it had risen to 20 bolivars per dollar.
This came after the bolivar had already experienced devaluation in November, which had seen it lose 40% of its value.
Analysts have become concerned due to the exchange rate’s behavior and they are now evaluating the impact of the devaluation on the inflation print for December and the coming year.
The country recently came out of a period of hyperinflation that had first begun back in 2017 and had continued for four years.
Economists are already predicting the inflation rate to reach 30% in December, but official inflation numbers have not been released by the central bank since October.