Welcome to Latam Insights, a compendium of Latin America’s most relevant crypto and economic news during the last week. In this issue: Bitcoin hinders El Salvador’s credit talks with the IMF, the Paraguayan Senate issues a statement supporting bitcoin miners, and Venezuela unveils a crypto-linked corruption scheme.
Latam Insights: Bitcoin Hurts El Salvador Credit Opportunities, Paraguay Supports Selling Power to Crypto Miners
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Bitcoin Reportedly Hurts El Salvador Credit Opportunities With the IMF
Bitcoin has become a relevant geoeconomic factor for El Salvador, as it is currently part of the talks between the country’s government and the International Monetary Fund (IMF). According to reports, the negotiations between these parties would be at a standstill, as the IMF demands changes in the country’s posture on bitcoin ( BTC) and cryptocurrencies.
Talks had been suspended since two years ago when President Nayib Bukele did not agree to review the Bitcoin Law, which established bitcoin as legal tender in the country in 2021.
Bukele’s government would be aiming to score a credit line for $1.4 billion to help expedite debt payments and other obligations. Nonetheless, the IMF has sent clear messages on this issue: IMF Director of Comms Julie Kozack stated that the risks associated with Bitcoin were a “key element” in the discussions with Salvadoran authorities.
Paraguayan Senate Issues Statement Supporting Crypto Mining Energy Sales
The Paraguayan Senate has approved a statement that supports cryptocurrency mining and delves into the significance of redirecting power surplus to support the activities of cryptocurrency mining companies. The statement, proposed by Senator Salyn Buzarquis, states that the Senate must declare its support to foreign crypto companies that settle in Paraguay due to its infrastructure investments that favor national companies in the energy department.
Buzarquis stated that energy sales for cryptocurrency mining allowed the National Power Administration (ANDE) to rake in over $100 million yearly, with “never before seen” guarantees from companies in the sector. According to Buzarquis, over 45 crypto-mining companies installed in Paraguay pay power tariffs ranging from $40 plus taxes per MWh to $52 plus taxes per MWh.
The power purchase agreements (PPA) signed with these companies are far more beneficial for Paraguay than selling heavily subsidized power to Brazil. Brazil pays $10 per MWh, 25% of what legal mining companies pay.
Venezuelan Authorities Unveil Mega Crypto Money Laundering Scheme Linked to Unreported Oil Sales
The Venezuelan Attorney General, Tarek William Saab, unveiled on April 9 the second wave of detentions linked to an embezzlement scheme that involved the sale of oil paid in cash and cryptocurrency, and its subsequent laundering using different methods. The scheme, managed in tandem by the former President of the state-owned oil company PDVSA Tareck El Aissami, and the former head of the cryptocurrency watchdog Sunacrip Joselit Ramirez, involved assigning and liquidating an undetermined number of crude assignments using digital transactions and cash, evading national controls.
Saab related that through informants, it was known that El Aissami and Ramirez used the enactment of sanctions against the Venezuelan government as a pretense to sidestep standard procedures. The informants stated that, once, $35 million was received in the bank account of a facade company, and then part of this money was converted into crypto.
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