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Latam Insights: El Salvador Reinforces Its Bitcoin Allegiance, Milei Drops Crypto From Omnibus Bill
Welcome to Latam Insights, a compendium of Latin America’s most relevant crypto and economic news during the last week. In this issue: El Salvador to deepen its Bitcoin commitment if President Bukele gets reelected, Argentine President Javier Milei drops crypto tax matters from Omnibus Bill, and Venezuela gets hit by gold sanctions.
El Salvador to Maintain Bitcoin as Legal Tender
El Salvador Vice President Felix Ulloa said in an interview with Reuters on Wednesday that bitcoin will remain legal tender in El Salvador during the second term of President Nayib Bukele even after the International Monetary Fund (IMF) again urged the country to drop the cryptocurrency as legal tender during negotiations for a billion-dollar loan.
Ulloa clarified that the victory of Bukele in the upcoming elections will contribute to the continuation of the Bitcoin policies, such as the launch of the volcano bonds, which are programmed to be issued during the first quarter of 2024. On the law that declared bitcoin as legal tender in El Salvador, Ulloa stated:
Not only will it (the law) be maintained … At this moment, it enjoys the greatest credibility in the entire world.
Recently, Bitfinex launched operations as a digital securities tokenization company in El Salvador, expecting strong demand for cryptocurrency-based products, reinforcing the trust in the country’s digital future.
President Javier Milei Drops Crypto Tax Opportunities From Omnibus Bill
The Argentine government has withdrawn the opportunities for declaring ownership of certain assets, including crypto, from the omnibus bill presented to Congress this month. The bill, titled “Law of Bases and Starting Points for the Freedom of Argentines,” seeks to advance reforms in several areas, including getting legislative powers for President Javier Milei.
The government dropped this and other parts of the bill to get faster approval of the bill, given that there was no consensus on the withdrawn issues. Guillermo Francos, minister of interior, stated:
The proposal is aimed at generating freedom for economic development. It was essential to get this out quickly. The tax part was smaller and delayed treatment.
Venezuela Hit by Reenactment of Gold Sanctions
The U.S. Treasury Office of Foreign Assets Control (OFAC) has revoked a license that allowed CVG Compania General de Mineria de Venezuela CA (Minerven), the Venezuela state-owned gold company, to be part of gold transactions in international markets. The U.S. convened to revoke the sanctions on Minerven back in October when an agreement was reached with Maduro’s government to review the participation of key opposition figures in the upcoming presidential ballot.
Also, the U.S. State Department Stated that more oil and gas-related sanctions would be reenacted if the Venezuelan government did not review this participation by April. Jorge Rodriguez, president of the National Assembly, defiantly called the U.S. government to apply the sanctions immediately. Answering to National Security Council spokesperson John Kirby, Rodriguez stated:
Save your ultimatum, sh*t Yankees. Kirby, shove your ultimatum where it fits you best.
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Lula Proposes to Revitalize South America Union USAN; Reinforces Need of Shifting Away From US Dollar
Luiz Inacio “Lula” Da Silva, President of Brazil, remarked on the need to retake South American integration mechanisms through the Union of South American Nations (USAN). Lula also proposed to shift away from the U.S. dollar by using a standard reference currency for bilateral settlements among countries in the region.
Brazil’s Lula Proposes to Unite South America Through USAN
Brazilian President Luiz Inacio ‘Lula’ Da Silva proposed to integrate all the countries in South America again through the Union of South American Nations (USAN) and to shift away from the U.S. dollar in bilateral settlements in the region.
While giving the opening speech of a summit with the presence of 11 presidents of South America, Lula stated that the region should rebuild its integration method to face the hurdles of the ongoing globalization process.
Lula stated:
There is no time to lose. South America has before it, once again, the opportunity to walk the path of unity. And you don’t have to start from scratch. USAN is a collective good. Remember that it is valid.
USAN is a regional integration institution that surged to organize the different views of countries in South America in 2008. While it has become relevant again with the reintegration of Brazil and Argentina, it still lacks the integration of half of the countries in the region, with Chile, Colombia, Ecuador, Paraguay, Peru, and Uruguay away from the organization.
Lula reinforced the need for integration in South America, explaining that “No country can face today’s systemic threats alone.” “Only by acting together can we overcome them,” Lula concluded.
Shifting Away From the U.S. Dollar
Lula also proposed USAN implement currencies different from the U.S. dollar in settling bilateral payments in the region and rescuing naive credit mechanisms to avoid relying on international financial institutions like the International Monetary Fund (IMF).
Abodu this, Lula declared:
We must also deepen our South American identity in the monetary field through more efficient compensation mechanisms and the creation of a common reference unit for trade, reducing dependence on extra-regional currencies.
Before, in a bilateral meeting with Venezuelan President Nicolas Maduro in Brasilia, Lula stated he had “dreams” of conducting trade relations in South America with a currency different from the U.S. dollar.
The governments of Argentina and Brazil had discussed issuing a South American common currency in January that will be directed to settle international transactions between MERCOSUR and BRICS countries.
What do you think about President Lula’s proposals for the South American Region? Tell us in the comments section below.
ECB’s Panetta Reinforces Digital Euro Focus on Payments
Fabio Panetta, a member of the executive board of the European Central Bank (ECB), announced the digital euro project was entering its final phase. Before the committee on economic and monetary affairs of the European Parliament, Panetta stated that the digital euro, if approved, would be focused on making payments easier for Europeans.
ECB’s Panetta Explains Digital Euro Payment Focus
Fabio Panetta, a member of the executive board of the European Central Bank, announced that the digital euro project, an initiative that seeks to digitize Europe’s fiat currency, was reaching its final stages of research, and stated that one of the first goals of the project is to establish it as a universal payment method.
In an introductory statement given on April 24 before the committee on economic and monetary affairs of the European Parliament, Panetta explained that there was no single digital means of payment across the European Union. Panetta stated:
We have been investigating the technical solutions that would enable people to easily make payments in digital euro, anywhere in the euro area.
Furthermore, he declared that the digital euro could be given legal tender status by legislators, making all merchants capable of accepting digital payments obliged to accept it. On the other side of the spectrum, it would allow banks and payment processors to cut their reliance on other providers, allowing the construction of a “truly European” new platform.
Payment Sovereignty and Structural Design
The supposed importance this project has for the structure of payments in Europe has been previously explained by ECB President Christine Lagarde, when she stated that the digital euro was “key” for European payment autonomy. At the time, Lagarde emphasized that many of the payment alternatives used by Europeans, like applications and cards, weren’t necessarily based in Europe.
Panetta also talked about the ideal requirements that the digital euro should fulfill if launched, stating:
People should be able to pay and be paid in digital euro anywhere in the euro area, no matter which intermediary they are using to access the digital euro or which country they are in.
Panetta stated that the next phase of the project would include the development and testing of technical solutions tied to the digital euro, as well as working with the European Commission regarding legislative proposals on the issue.
What do you think about the digital euro project and its development? Tell us in the comments section below.
Bitfinex CTO Reinforces Rumors Exchange Has Raised $1 Billion in IEO
n According to Bitfinexs CTO, the platform has succeeded in raising billion via a token sale to private investorsn
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