On November 25, 2020, the Vice President of Venezuela announced a set of economic measures that seek to strengthen the national currency, El Bolivar (Bs).
These measures, which I will describe below, have a tax and authoritarian origin, so in my opinion, they have gotten off to a wrong start.
In contrast to the decentralized consensus protocols of Blockchain technology, this centralized measures and restricts personal and collective financial freedoms.
In broad strokes we can summarize these measures in 3 outstanding aspects:
- Extension of limits for bank transactions.
- Appointment of commercial allies who will act as exchange house service providers.
- Creation of a tax on foreign exchange transactions.
Extension of limits for bank transactions.
The Superintendency of the Institutions of the Banking Sector of Venezuela (**Sudeban *) will establish an extension of the limits for transactions with debit cards and electronic transfers, both for natural and legal persons.
"Trade allies" of the exchange houses will be enabled with the intention of increasing the number of service providers.
Until now, there are no details of this procedure, but with the signing of new exchange house operators, it is expected that liquidity in foreign currency within the financial apparatus will increase.
Although the term "Commercial Allies" supposes that it will be an elite group very close to the government leaders who will receive this "Fresh Money" and consequently will also receive instructions on the destination of the operations.
Tax on Foreign Currency Transactions.
Foreign currency operations in the bank will have a charge greater than 2% of the transaction amount. In this way, a "transactional tax" is created which will be applied to movements made in foreign currency within financial entities.
This measure will undoubtedly have negative effects on the economy since it would directly increase the prices set in dollars.
What these economic measures seek is to increase the demand for bolívares, and thus try to stabilize the exchange rate, promoting the use of the Bolívar over the use of the dollar by increasing the limits of electronic transactions and at the same time creating taxes on the currency transactions.
But these are inefficient and unconsulted measures since there were no working groups with the private sector. They are simply new measures imposed in an authoritarian way.
Taxes have had minimal efficiency within the Venezuelan tax system. Internal taxation has collapsed
These measures will not give a real fight against exchange speculators but will create a new income to the treasury on a constant basis and, in addition, in hard currency.