A prominent member of Venezuela's National Constituent Assembly, Hermann Escarra, disclosed in an interview with Reuters that the assembly is preparing a constitutional reform that would establish a central bank for crypto assets and a high court ranking above the Supreme Court. This marks a significant institutional step by the Venezuelan government in the cryptocurrency space.
Central Bank for Crypto Assets and Superior Court
Escarra, described by Reuters as one of the most influential members of the assembly tasked with revising the 1999 constitution, 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 elaborated that the central bank would have functions in exchange, monetary, and financial policy. He also noted that the draft changes would be presented to the assembly's board within 35 days.
President Nicolás Maduro called for a constituent assembly in May 2017 to draft a new constitution, replacing the one left by his predecessor Hugo Chávez. The election for the assembly was held on July 30, 2017. However, according to the BBC, the assembly was controversial from the start, with opposition activists denouncing it as unconstitutional while supporters argued it would bring peace to the polarized nation.
Integration of the Petro Cryptocurrency
Escarra further revealed that the reform is expected to include the petro, a digital currency announced by Maduro's government in February 2018 as a means to increase foreign exchange earnings amid the economic crisis and U.S. sanctions. The government claims the petro is backed by the country's oil reserves. Yet, the petro has been mired in controversy due to a lack of transparency and credibility. Reuters reported that “cryptocurrency experts have said the petro suffers from a lack of credibility because of a lack of confidence in Maduro’s government and the mismanagement of the country’s existing national currency.”
In June 2018, Maduro dismissed the Superintendent of Cryptocurrencies, Carlos Vargas, who was responsible for promoting and selling the petro, replacing him with Joselit Ramírez. Economist Víctor Álvare told El Nacional that the dismissal was a clear indication that Vargas had failed to sell the cryptocurrency, and the goal of raising $5 billion from the petro was not met. He noted that the topic had practically disappeared from official discourse.
Linking the Sovereign Bolivar to the Petro
On July 25, Maduro announced that the country's new currency, the Sovereign Bolivar (Bolívar Soberano), scheduled for release on August 20, would be tied to the petro. While the government pushes its crypto agenda, the proposed creation of a central bank for crypto assets would make Venezuela the first country to enshrine such a framework at the constitutional level. Additionally, the plan to create a superior court above the Supreme Court signals a potential overhaul of the judiciary.
Given the deep political and economic challenges facing Venezuela, the fate of this constitutional reform remains uncertain. However, Escarra's influential position suggests that the proposal has a real chance of advancing. The international community will be watching closely as Venezuela attempts to leverage cryptocurrency as a tool to navigate its crisis.