Hermann Escarra, a prominent member of Venezuela's National Constituent Assembly, has disclosed to Reuters that the assembly is drafting a constitutional reform that would create a central bank specifically for cryptocurrencies and a new court superior to the Supreme Court.
Constitutional Overhaul for Crypto
In an interview in Caracas, Escarra stated: “The National Constituent Assembly of Venezuela… is preparing a reform to the Constitution that would include a central bank for crypto-assets and a superior court to the Supreme Court of Justice.” He clarified that the central bank would have full authority over exchange rates, monetary policy, and financial policy. The draft changes are expected to be presented to the assembly’s board within 35 days.
President Nicolás Maduro first called for a constituent assembly in May 2017 to replace the 1999 constitution drafted under his predecessor Hugo Chávez. The assembly, elected on July 30, 2017, has been highly controversial. Opposition groups denounced it as unconstitutional, while the government argued it would stabilize the polarized nation. The upcoming reform is seen as Maduro’s latest effort to leverage cryptocurrency to circumvent US sanctions and alleviate the severe economic crisis.
The Petro Saga and New Bolivar
The reform explicitly includes the petro (PTR), a cryptocurrency launched by the Maduro administration in February 2018, supposedly backed by the country’s vast oil reserves. However, the petro has faced widespread skepticism due to a complete lack of verifiable fundraising data and no credible backing. In June, Maduro fired Carlos Vargas, the superintendent of cryptocurrencies tasked with promoting the petro, and replaced him with Joselit Ramírez. Economist Víctor Álvarez noted that this dismissal revealed the petro’s failure to meet its $5 billion sales target, which “practically disappeared from the official discourse.”
On July 25, Maduro announced that the new sovereign bolivar (Bolívar Soberano), debuting on August 20, would be pegged to the petro. This move aims to anchor the collapsing national currency to a controversial digital asset. Critics argue that creating a central bank for cryptocurrencies may further undermine financial stability rather than restore it, given the government’s poor track record with both the petro and the previous bolivar.
Implications and Reactions
If approved, Venezuela would become the first nation to constitutionally enshrine a central bank dedicated to digital assets. Yet the plan remains highly contentious. The lack of transparency around the petro, combined with the government’s authoritarian tendencies, raises questions about the true intent of the reform. Meanwhile, the US Treasury has continued to ramp up sanctions on Venezuelan officials and entities involved in the petro scheme.
As the August 20 launch of the sovereign bolivar approaches, all eyes are on whether the “crypto central bank” will ever materialize—and whether it can provide any real relief to Venezuelans suffering from hyperinflation and economic collapse.