Venezuela - Lightning Network wallets are proliferating
But the state's crypto regulator SUNACRIP poses a threat.
In Venezuela, a handful of Lightning Network wallets have caught on to a 30mn population used to improvising with alternative means of payment. Muun, Blue Wallet, Phoenix, among others are being used at the moment.
That’s a good sign for Lightning Network companies that want to enter the dollarized payment market. Capital controls have been lifted. The opposition has proposed sanctions relief if Maduro complies with negotiations. Maduro, it seems, is attempting to bring his cohort into line.
Relief would be good for investment in Bitcoin infrastructure and Lightning Network companies. Rumors of Jack Mallers’ Strike putting Venezuela high on its LatAm list are swirling around Latin America Bitcoin circles. But there’s good reason for Strike and other companies to still be cautious if not right out avoidant of Venezuela.
The problem is SUNACRIP. The state-run agency is headed by a US sanctioned individual. The agency is a direct extension of Nicolas Maduro’s regime and doing business with his government - though they have been loosely and somewhat arbitrarily applied - can warrant sanctions.
SUNACRIP grants exchanges their operating licenses. In late January, the agency revoked the license of two exchanges: Cave Blockchain and Criptomundo. This demonstrates that the agency isn’t a facade. It engages with the crypto sector and intervenes in regulatory affairs.
Strike or another company operating on the Lightning Network could likely face similiar engagement, in which case US sanctions would make it extremely difficult to operate. Under the scenario that Maduro obtains enough sanctions relief to bring investors into Venezuela, SUNACRIP’s legitimacy would be tested. If sanctions stick, it would be reasonable for investors to remain cautious.