Venezuela’s military launches Bitcoin Mining

Venezuela’s military launches Bitcoin Mining

The Venezuelan military starts up a mining farm. President Maduro is under pressure. With his crypto-currency activities, he wants to circumvent US sanctions in particular.

The enormously high inflation is one of the main reasons why crypto-currencies are widely used in Venezuela. Even the restaurant chain Pizza Hut now accepts payments in Bitcoin. It is true that the state under President Nicolas Maduro launched its own crypto currency, Petro, a good two years ago. But its success by BitQT is limited, as Petro is in fact not accessible to large parts of the population.

Bitcoin Mining without added value

In order to remain economically solvent, the Venezuelan government has apparently now come up with an idea. According to this, the military will also be responsible for mining crypto-currencies in the future. An Instagram post shows a technical brigade of the Venezuelan army inaugurating the new „Digital Assets Production Center“. As the video shows, the centre houses various ASIC mining equipment. This is used for solving proof-of-work algorithms.

The Venezuelan population, however, does not seem to benefit from the project. In the video, General Lenin Herrera mentions as a declared goal of mining the „strengthening and self-sufficiency of our units of the Bolivarian army“. The mining centre opens up „untapped sources of income“. It also represents an alternative to the „trust system blocked and controlled by colonial interests“. This is to be seen as a clear allusion to US foreign trade policy. Indeed, the United States has imposed several sanctions on the Maduro regime and its allies.

US keeps an eye on Maduro’s crypto activities

It is therefore also quite possible that the US military is a thorn in the side of Venezuela’s recent crypto activities. Recently, Admiral Craig Stephen Faller referred to Maduro’s questionable use of cryptography. According to an Instagram post, he even went so far as to link its use to drug trafficking and terrorism. He added that the US forces were keeping an eye on all such operations.

Meanwhile, much of Venezuela is in chaos. The price of oil has fallen to a low. Political unrest continues and the COVID 19 pandemic is raging. These are all factors that are not exactly helping the economy to recover. Maduro seems to want to use his bag of tricks with crypto currencies. At the end of September, the ruler presented a new bill to overcome the effects of US sanctions by using crypto-currencies. In Venezuela, crypto-mining is officially permitted for private individuals. But: the activities are regulated by a kind of government pool. So the state could collect commissions at its discretion.