As Venezuela's presidential crisis drags on, one of the men claiming the title, Juan Guaidó, has called in cryptocurrency outfit Circle to help deliver aid to the country's medical workers via a stablecoin.
Guaidó declared himself acting president of Venezuela following the disputed 2018 elections, setting up a struggle against incumbent Nicolás Maduro. While Guaidó has been recognised as acting president by more than 50 countries, including the US, Maduro continues to control the country's state institutions.
As the presidential crisis simmers, the country has been devastated by Covid-19, economic collapse, hyperinflation, and international sanctions.
Circle says it is working with Guaidó's "legitimate elected government" and fintech Airtm to distribute some of the proceeds of these sanctions to front-line medical workers battling the coronavirus.
Currently, Circle says that medical supplies and equipment are scarce as the import/export market has been "destroyed by currency and capital controls", while healthcare workers are seeing their wages evaporate due to hyperinflation.
Its answer - coordinated with the US government - is an aid disbursement pipeline that uses the dollar-backed USDC to bypass the controls imposed by Maduro over the domestic financial system.
The US government is releasing assets seized through sanctions on Maduro to a Guaidó "government" account at a US bank. These funds are used to mint USDC, which is sent to Airtm, a bank-and-blockchain connected dollar-denominated payment platform.
Airtm’s network of dollar-to-anything forex agents enables withdrawals to local currency in Latin American bank accounts at free market rates. Once the USDC is received on Airtm wallets, it is then dispersed to accounts of Venezuelan healthcare workers.
The healthcare workers are then able to withdraw to their local bank accounts as bolivars at free market rates, send to other users, or even spend the funds online anywhere using Airtm’s virtual debit card - bypassing the need for a bank at all.
"All of this is powerful, inspiring, and underscores the ability of the internet and digital currency to transform not just how value and money moves, but ultimately also the freedom of people to transact, even in the face of brutal dictatorships," says Circle.
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