Venezuela president Nicolas Maduro says the country is to start using cryptocurrency in both domestic and global trade, as part of efforts to neutralize crippling U.S. economic sanctions.

Speaking in the countrys parliament on Sept. 29, Maduro revealed that the move will give new strength to the use of petro and other cryptocurrencies, national and global, in domestic and foreign trade

The country has already been trying to use its national crypto, the petro, for this purpose but without much success.

Maduro was delivering an anti-sanctions law aimed at spurring economic and social development, both paralyzed by U.S. sanctions. The blockade has also throttled Venezuelas trade relations with much of the world, where the U.S. dollar still dominates.

Now, the oil-rich South American country has set its sights on virtual currency. Venezuela, the worlds sixth largest oil producer, is hoping to leverage cryptocurrencies to compensate for the squeeze in petrodollars arising from the economic sanctions. Bloomberg quoted Maduro as saying:

The finance minister and Venezuelas central bank have new instruments which we will activate very soon so that everyone can do banking transactions, as well as national and international payments through the central banks accounts. Venezuela is working within the cryptocurrency world.

Excoriated by the West, the leftist Venezuelan leader thundered: Donald Trump and his sanctions are blocking Venezuela from carrying out transactions in any of the worlds banks. Theres other formulas to pay, and its what were using, because our payment system works perfectly in China and Russia.

According to the Bloomberg report, the central bank of Venezuela is formally testing whether it can hold crypto in its reserves. The immediate targets include bitcoin (BTC) and ethereum (ETH).

Both assets have been requested by state-run Petroleos de Venezuela SA. The oil company wants to send BTC and ETH to the central bank and then have it pay the firms suppliers with the coins, says the report.

Venezuelas deepening economic crisis has led to a massive adoption of cryptocurrency, with more than $8 million worth of bitcoin traded peer-to-peer each week, Coindance data shows. The government recently signed a new tax agreement that enabled it to start collecting taxes and fees in the petro.

What do you think about Venezuela turning to crypto in international trade? Let us know in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

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Venezuela To Start Using Cryptocurrency in Global Trade in Efforts To Fend off US Sanctions | Emerging Markets - Bitcoin News

Professionals in the crypto industry believe that governments are behind the curve on the perceived risks, opportunities, and regulation of cryptocurrency, according to a new survey by RUSI and ACAMS.

Criminal activity remains top of mind for both governments and crypto industry professionals, with 70% of total respondents highlighting this as a concern. When asked to select any areas of concern, respondents overall indicated they are worried about the use of cryptocurrency for money-laundering (84%), on the dark web (84%), for procurement of illicit goods (83%) by sanctioned actors (82%), by terrorist organisations (79%), to fund human trafficking (76%), and in fraudulent initial coin offering (75%).

The survey finds respondents split over whether they consider cryptocurrency a risk or an opportunity with significant gaps between government and financial industry perceptions and those directly involved in the crypto industry. The cryptocurrency industry largely believes that cryptocurrency transactions offer more transparency than traditional financial transactions, and that transactions are compatible with sanctions screening and compliance, while financial institutions and government disagreed.

While cryptocurrency professionals are aware of the risks in their industry, other actors such as the media, politicians, and the public are less aware of the risks. Overall, there is a far higher likelihood (78%) that institutions will seek guidance from non-governmental organisations such as FATF, trade bodies, and blockchain associations, than from governments. Respondents of the survey are also of the view that governments are more likely to defer to international bodies (45%) over their own regulatory systems (35%).

The survey, commissioned by RUSI and ACAMS in partnership with YouGov, is based on 566 unique responses from across the global financial and cryptocurrency industries, including cryptocurrency exchanges, financial regulators, and financial intelligence units.

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Banks, governments, and crypto industry divided on cryptocurrency risk, survey reveals - The Paypers

In order to achieve widespread usage as an alternative to fiat options, blockchain and cryptoassets need to be classified and treated as currencies; the recent update from the Office of the Comptroller of the Currency (OCC) is a great move in that direction.

ASSOCIATED PRESS

Blockchain and cryptocurrencies have been part of the financial and economic conversation ever since bitcoin burst into the mainstream during 2017. That said, in order to become an integrated part of the financial system, and to ultimately serve as the basis for an alternative financial system, the blockchain and crypto space need to work with some of the very regulators it was designed to disrupt.

From the very beginning one of the primary issues and obstacles to wider crypto utilization as a medium of exchange and business transactions is the price volatility that correctly or not is associated with this asset class. Stablecoins were designed and developed to address this issue, but even after addressing the price volatility so often associated with cryptocurrencies, there was one fundamental issue that remained unaddressed; the lack of regulatory guidance.

This all changed with the update from the OCC.

Breaking down this information and updated guidance, there are a few key considerations and facts that should be factored into every conversation.

Rules matter. It is almost impossible to overstate just how important and relevant this updated guidance is for the broader blockchain and cryptoasset space. The idea of blockchain and cryptocurrency was to serve as an alternative to existing fiat currencies, but without consistent and understandable guidelines this will remain an idea rather than reality. Putting into place some sort of rules and structure will help to encourage wider adoption of cryptocurrencies, and make doing so simpler for individuals and entrepreneurs.

Establishing frameworks and consistently enforceable rules might not have been the original motivation for blockchain or crypto entrepreneurs, but having these rules in place is essential for the continued development and maturation of the space.

Not all crypto are the same. This might sound redundant, but it is important to remember that not every cryptocurrency or blockchain is the same. Specifically, and especially pertinent to this conversation, is that the recent OCC guidance and update only apply to stablecoins that are backed on a 1:1 basis with existing fiat currencies.

What are stablecoins? Stablecoins are cryptocurrencies that are pegged, tethered, or otherwise supported by some sort of external asset. In the context of actually being used as a medium of exchange, stablecoins seem to represent the most viable path forward. That said, in order for these cryptocurrencies to operate as advertised, there needs be equivalency to current fiat options; the OCC guidance is pointing in that direction.

Collaboration is key. Much has been written about how blockchain and cryptocurrencies will disintermediate the existing financial system, but that only represents a partial perspective of the situation. This recent update from the OCC seems to indicate that, on an increasing basis, cryptocurrencies are becoming part of the incumbent financial system. Working with incumbents might not have been the original idea or goal of cryptocurrency organizations, but it does seem that doing so will be critical to the success of the space.

The notification and update from the OCC might have flown under the collective radar for many accounting and financial professionals, simply because there is so much news that comes at the business landscape on a nearly continuous basis. The OCC is not the only regulator that matters to the blockchain and crypto sector, but being among the first to clarify existing guidance will hopefully encourage other agencies to do the same.

Regulatory guidance and clarifications might not be as scintillating as the latest social media posting or political controversy, but updates such as this are arguably even more important for the blockchain and crypto space. This guidance might have been issued by the OCC, and seem to only pertain to some stablecoins, but it is an important first step in what will hopefully be a much improved regulatory landscape.

Rules and guidelines have a large role to play in the success or failure of any idea, crypto is no exception to this role, and it looks like the rule makers are starting to realize the true potential of this sector.

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Blockchain Regulation Is Making Headlines, And That Is Great For Cryptocurrency Development - Forbes

Divided opinion on the perceived risk of cryptocurrency including the links between cryptocurrency and illicit purposes were among the key findings of a global survey -- the second commissioned by RUSI and ACAMS in partnership with YouGov and based on 566 unique responses from across the global financial and cryptocurrency industries, including cryptocurrency exchanges, financial regulators and financial intelligence units.

Criminal activity remains top of mind for both governments and crypto industry professionals, with 70% of total respondents highlighting this as a concern. When asked to select any areas of concern, respondents overall indicated they are worried about the use of cryptocurrency for money-laundering (84%), on the dark web (84%), for procurement of illicit goods (83%) by sanctioned actors (82%), by terrorist organizations (79%), to fund human trafficking (76%), and in fraudulent initial coin offering (75%).

However, the survey demonstrates a disconnect between governments and the industry on the nature of risks posed by cryptocurrency and ongoing concerns over the use of cryptocurrency for criminal activity. The cryptocurrency industry was notably less worried about each of the listed risks, considering only sanctions evasion as a high priority.

The survey finds respondents split over whether they consider cryptocurrency a risk or an opportunity - with significant gaps between government and financial industry perceptions and those directly involved in the crypto industry. The cryptocurrency industry largely believes that cryptocurrency transactions offer more transparency than traditional financial transactions, and that transactions are compatible with sanctions screening and compliance, while financial institutions and government disagreed.

While cryptocurrency professionals are aware of the risks in their industry, other actors such as the media, politicians and the general public are less aware of the risks. Overall, there is a far higher likelihood (78%) that institutions will seek guidance from non-governmental organisations such as FATF, trade bodies, and blockchain associations, than from governments. Respondents of the survey are also of the view that governments are more likely to defer to international bodies (45%) over their own regulatory systems (35%).

Kayla Izenman, research analyst with the Centre for Financial Crime and Security at RUSI and co-author of the survey said, The crypto industry appears to have a great amount of confidence in their own abilities to counter and detect risk, whereas government doesnt have nearly as much faith. Bridging this gap is essential, as all sectors agree that the use of cryptocurrency is on the rise, but we know theres no clear consensus on domestic regulatory action. This risks opening the door to illicit activities.

Rick Mcdonell, executive director, ACAMS and former executive secretary of the Financial Action Task Force (FATF) and co-author of the survey said, The results of this survey give a unique global insight into how respondents from governments, financial institutions and the crypto industry itself think about cryptocurrency: its potential and its risks. Their views are well worth noting as policy making and regulatory enforcement continue to take shape around the world.

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Banks, governments and crypto industry divided on cryptocurrency risk - Finextra

As we end the Q3 2020, lets look at what happened in the past quarter in the crypto tax compliance world (What Happened In the Cryptocurrency Tax Space In Q2 2020).

The 2020 draft Form 1040 released by the IRS on August, 18, 2020 showed that the infamous virtual currency question which was first introduced on Schedule 1 for the 2019 tax year has been moved to the front and center of the Form 1040. With this placement, every US taxpayer filing a tax return in 2020 will have to answer this question and file applicable forms if they have cryptocurrency transactions. This showed how seriously the IRS is looking into the crypto space.

IRS Draft Form 1040

In this quarter, the IRS awarded a $250,000 contract to a crypto tracing software company to help with ongoing crypto tax audits. The criminal investigation division of the IRS also published a $625,00 bounty to anyone who can break into Monero and Lightning networks.

We saw crypto users receiving another round of crypto tax warning letters printed on August, 14, 2020. The IRS first sent these out to 10,000 taxpayers in 2019. The warning letters came in three variations: Letter 6173, Letter6174 & Letter 6174-A.

In August 2020, we noticed both small and large crypto users getting letter 6174-As. These letters alerted recipients about their crypto tax reporting obligations and recommended amending the tax returns to fix errors and omissions.

In a memorandum released by the IRS on August, 28, 2020, the service concluded that cryptocurrency received for performing microtasks, for example, completing an online survey or reviewing images, is taxed as ordinary income and may even be subject to self-employment taxes. Even before this memorandum, cryptocurrency received for performing services was taxable as ordinary income. This memorandum reinforced this position and stressed that the payments were taxable regardless of the value and the manner in which it is received.

Jim Harper, a former Coinbase user and a Bitcoin researcher, sued the IRS, its commissioner and up to 10 unnamed agents of violating his privacy and due process rights under the Fourth and Fifth Amendments of the U.S. Harper was one of the recipients of the 10,000 tax warning letters sent out by the IRS in 2019. Harper claimed that he had paid taxes since 2013 and accused the IRS for violating his privacy.

A letter addressed to the IRS signed by four congressmen asked for more clarity on staking related income reporting. The letter pointed out that staking rewards should not be taxed at the time of the receipt or discovery similar to other taxpayer-created property such as crops, minerals, livestocks and artwork. The rewards should be taxed only when they are sold.

Disclaimer: this post is informational only and is not intended as tax advice. For tax advice, please consult a tax professional.

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What Happened In The Cryptocurrency Tax Space In Q3 2020 - Forbes

A NEW survey conducted by the Royal United Services Institute (RUSI) and ACAMS reveals how professionals in the cryptocurrency industry believe that Governments are behind the curve on the perceived risks, opportunities and regulation of cryptocurrency.

The survey, which is actually the second commissioned by RUSI and ACAMS in partnership with YouGov, is based on 566 unique responses from across the global financial and cryptocurrency industries, including cryptocurrency exchanges, financial regulators and financial intelligence units.

While the survey reflects doubts about the abilities of Government, the cryptocurrency industry is much more confident in its own tools and preparedness than other audiences to mitigate potential risks in the sector.

Criminal activity remains front and centre for both Governments and crypto industry professionals, with 70% of total respondents highlighting this as a concern. When asked to select any areas of concern, respondents overall indicated theyre worried about the use of cryptocurrency for money-laundering (84%), on The Dark Web (84%), for procurement of illicit goods (83%) by sanctioned actors (82%), by terrorist organizations (79%), to fund human trafficking (76%) and in fraudulent initial coin offering (75%).

However, the survey demonstrates a disconnect between Governments and the industry on the nature of the risks posed by cryptocurrency, as well as ongoing concerns over the use of cryptocurrency for criminal activity. The cryptocurrency industry was notably less worried about each of the listed risks, considering only sanctions evasion as being of high priority.

Risk or opportunity?

The survey finds respondents split over whether they consider cryptocurrency a risk or an opportunity, with significant gaps between Government and financial industry perceptions and those directly involved in the crypto industry. The cryptocurrency industry largely believes that cryptocurrency transactions offer more transparency than traditional financial transactions and that transactions are compatible with sanctions screening and compliance, while financial institutions and Government disagreed.

While cryptocurrency professionals are aware of the risks in their industry, other actorssuch as the media, politicians and the general public are less aware of the risks. Overall, theres a far higher likelihood (78%) that institutions will seek guidance from non-Governmental organisations, including blockchain associations, than from Governments.

Respondents to the survey are also of the view thatGovernments are more likely to defer to international bodies (45%) over their own regulatory systems (35%).

KaylaIzenman, research analyst with the Centre for Financial Crime and Security at RUSI and co-author of the survey, said:The crypto industry appears to have a great amount of confidence in its own abilities to counter and detect risk, whereas Government doesnt have nearly as much faith. Bridging this gap is essential as all sectors agree that the use of cryptocurrency is on the rise, but we know theres no clear consensus on domestic regulatory action.This does riskopening the door to illicit activities.

Rick Mcdonell, executive director at ACAMS and co-author of the survey, added: The results of this survey give a unique global insight into how respondents from Governments, financial institutions and the crypto industry itself think about cryptocurrency, its potential and its risks. Their views are well worth noting as policy-making and regulatory enforcement continue to take shape around the world.

Key survey findings

An overwhelming majority of respondents were concerned about the links between cryptocurrency and criminal activity. However, where other respondents ranked illicit purposes highly, the cryptocurrency industry ranked illicit purposes as the least common use.

The cryptocurrency industry and other respondents were divided on their perceptions of cryptocurrency risk. 63% of banks and 56% of Governments saw cryptocurrency as a risk as opposed to only 9% of the cryptocurrency industry.

Asian financial institutions appear to be more friendly towards cryptocurrency than North American and European financial institutions.

All respondents believe that the use of cryptocurrency for day-to-day payments will increase in the next five years.

*Access the survey results in full online athttps://www.acams.org/en/ACAMS-RUSI-Crypto-Survey-Report

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Banks, Governments and crypto industry professionals divided on cryptocurrency risk suggests RUSI survey - Fire and Security Matters

2020 has brought with it a sense of uncertainty across asset classes, cryptocurrency included.

Though the major cryptocurrencies like bitcoin and ether initially fell during the onset of the pandemic, they have since recovered their losses. Going forward, it seems possible that many investors will the pandemic as a net positive for crypto, as more family offices and private individuals could seek digital assets as a way to protect against inflation risk.

DBS chief economist Taimur Baig believes 2020 is "shaping up to be a landmark in the history of digital finance," and cryptocurrency is here to stay. According to Baig, public and private digital currencies remain brave new frontiers, with new use cases, technological developments, and challenges appearing regularly.

The growing demand is encouraging innovation. iCoinSoft, one of the first U.S. blockchain software developers, has been providing technology for e-commerce and crypto exchanges since 2017, but the company is now working on a new solution for startups and smaller businesses planning to integrate cryptocurrencies.

iCoinSoft CEO Aleksandr Iurev believes cryptocurrencies are finally becoming mainstream.

Now, when the ICO race is over, the digital finance market is more predictable, said Iurev, who has been working on democratizing access to cryptocurrency exchanges across the world. The crypto market needed a new type of investor, and the pandemic pushed people to look more towards crypto assets.

In July, Visa Inc (NYSE: V) announced it has been working closely with digital currency platforms to provide a bridge between digital currencies and their existing global network of 61 million merchants. Mastercard (NYSE: MA), too, is expanding its cryptocurrency program.

Companies such as Robinhood, Square Inc (NYSE: SQ), and Revolt have been operating in the cryptocurrency space for years. In its recent earnings report, Square reported that its Cash App had generated $306 million in bitcoin revenue.

Previously shunned by many in the mainstream financial world, cryptocurrency is now being integrated into the business model of leading companies. At the end of September, a letter by the Office of the Comptroller of the Currency (OCC) set out to clarify the legal position on financial institutions, such as banks and savings associations that are seeking to offer cryptocurrency savings.

The letter was written in response to the growing demand for these products and clarified that the law must be adhered to in the process of offering these services. According to the OCC, banks and other service providers must increasingly learn to leverage new technologies and innovative ways to serve customer needs.

Until recently, in the absence of clear regulations, choosing the best and most secure exchange was up to crypto investors. Developers of crypto exchanges are using different approaches and programming languages that sometimes have a crucial impact on overall security and speed.

Iurev of iCoinSoft prefers a compiled approach, similar to the one used by NASDAQ and other traditional stock exchanges. We chose the compiled programming languages, because it allows executing orders in a fraction of a second, said Iurev. Those exchanges built on interpreted programming languages are normally tens or even hundreds of times slower.

Soon, a new legal framework could stimulate the development of crypto exchanges. Two new bills introduced in Congress in September the Securities Clarity Act and the Digital Commodity Exchange Act could finally offer more clarity and protection for users of digital commodities.

Disclaimer:The author of this post does not hold any public or private positions in any of the companies mentioned. The companies sourced in this article were selected by various public sources, recommendations, and word of mouth. Please consult your financial advisor before investing in any cryptocurrencies, stocks, or companies as they can pose risks for the average investor. This post is informational in nature and does not constitute financial advice.

2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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How The Pandemic Is Stimulating Innovation In Crypto - Benzinga

Coinbase owners in the UK who have received more than 5,000 ($6,474) in cryptocurrency will have their details passed to the UK's tax authority HMRC, according to an email from Coinbase seen by Decrypt.

The email said that HMRC originally required Coinbase to provide certain records of its UK customers, between 2017 and 2019. However, after discussions with the tax authority, the notice was revised so that it only affects users that meet some minimum requirements.

"Based on further discussions with HMRC, a revised noticed was issued with reduced scope that now requires the disclosure of customers with a UK address who received more than 5,000 worth of crypto assets on the Coinbase platform during the course of the 2019/2020 tax year," the email stated.

This doesn't come as a big surprise. Last year, HMRC sent letters to multiple crypto exchanges, requesting information on UK residents that had moved money using the exchange between 2017 and 2019. This request is likely the original notice that Coinbase was referring to.

However, by negotiating with HMRC it seems that the exchange has reduced the amount of information it will be sending to the tax authorityparticularly focusing on investors that have received greater amounts of cryptocurrency.

UK citizens are still required to pay capital gains tax if their cryptocurrency has gone up in value, above the minimum threshold. Any information that HMRC receives will likely be used to check if individuals are reporting their own taxes correctly.

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Coinbase UK to Disclose Wave of Cryptocurrency Owners to HMRC - Decrypt

BABB, the blockchain banking, and fundraising challenger, partners with Cigniti Technologies to leverage its cutting-edge Quality Engineering expertise.

The BABB business model is primarily delivered via their mobile apps. BABB wanted to ensure their application is highly secure, provides the best user experience and keeps pace with changing market conditions. This demanded an intense and structured approach to testing across devices and platforms (iOS and Android).

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Cigniti leveraged its proven mobile quality engineering methodology to perform both functional and non-functional testing of the BABB mobile app. The team executed user acceptance testing of the key user journeys that includes multiple functionalities and features. Cigniti also performed security testing in the form of dynamic application security testing, mobile application security testing and API security testing.

Speaking on the occasion,Srikanth Chakkilam, CEO of Cigniti Technologies said, We are excited to be a part of BABBs journey and look forward to growing in the space of cryptocurrency. Blockchain is being implemented across industries that will impact our day-to-day lives. It becomes imperative for organisations to pay heed to the quality and testing needs of these technologies.

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On this journey with Cigniti,Grant Van Wyk, CTO of BABB stated, The current unbanked world market of approximately 2 billion people represents a $380B untapped industry. Our launch in the UK is just the beginning. To be able to scale up and grow rapidly it was crucial to have an independent specialist ensure the quality of our platforms. Cigniti has demonstrated the steep learning curve and agility required to test such a platform.

Recommended AI News: GammaRey Names Mark Carter as Chief Executive Officer

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London Based BABB Partners With Cigniti Technologies for Software Testing of Their Cryptocurrency Platform - AiThority

The rising energy demand of proof-of-work cryptocurrencies such as Bitcoin (BTC) has been a hotly debated topic. But the 3rd Global Cryptoasset Benchmarking Study by the University of Cambridge shows that 76% of cryptocurrency miners use electricity from renewable energy sources as part of their energy mix.

The study found that over 39% of the total energy consumed by PoW cryptocurrencies including Bitcoin, Ether (ETH), Bitcoin Cash (BCH) and others comes from renewable energy sources.

This is in contrast to a previous such study by the university, which found that only 28% of the total energy consumed for cryptocurrency mining came from renewable resources. In 2018, 60% of the miners used renewable energy sources as part of their energy mix.

According to the latest study, hydroelectric power is the most common source of energy for miners. Almost 62% of miners are reported to be using hydroelectricity. Coal and natural gas sources take the second and third spots at 38% and 36%, respectively.

Wind, oil and solar energy are the three other common energy sources for cryptocurrency miners.

The report further divides miner energy consumption by region, noting that miners from Asia-Pacific, Europe, Latin America and North America use an almost equal percentage of hydroelectric power as compared to electricity from other sources such as coal, natural gas, wind and oil.

Energy from coal is most common in the APAC region, contributing almost an equal amount of electricity to miners as hydroelectric sources. No miners from Latin America use coal-fired electricity to mine cryptos.

The report also notes that APAC miners contribute almost 77% of the Bitcoin hash power but use the lowest amounts of renewable energy sources. And while North America adds only 8%of the total hash power, 63% of the energy consumed in mining Bitcoin came from renewable sources. Europe is only second to North America with almost 30% of its cryptocurrency mining powered using renewable energy. The continent contributes nearly 10% of the worldwide Bitcoin hash power.

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Report: 76% crypto miners use renewables as part of their energy mix - Cointelegraph