Despite frustrations caused by the disputed 2019 Presidential election in Venezeula, healthcare workers are getting financial aid, thanks to Crypto.
Airtm, a Latin American crypto exchange, is working with Circle and the US government to dispatch much needed aid to first line workers in Venezuela. This aid distribution has some complicated politics behind it, but the usefulness of the technology is clear.
Venezuela has seen a difficult political reality recently, with two different men claiming the presidency as their own. Nicolás Maduro became the country’s leader in the wake of Hugo Chavez’s death from cancer in 2013. In 2019, a disputed election led to another man, Juan Guaidó, claiming to be the country’s leader.
While Guaidó says his legitimacy stems from his role as head of the National Assembly, Maduro disputes this. The current US administration has been warm to Guaidó as well.
It has also accused Maduro of drug trafficking and President Trump even offered a $15 million reward for Maduro’s arrest.
Despite these tensions amid politicians, Maduro remains in power and in the presidential palace, with the military, allies, and the state-run oil company backing him.
Over 50 countries now recognize Guaidó as President of Venezeula. In turn, Maduro limited Guaidó’s access to funds. Nonetheless, Guaidó maintains he is the true president. And it is through him that aid is meant to be distributed. Unfortunately for Guaidó, he has no control over Venezuela’s treasury.
The Work Around
But there indeed exists a way for Guaidó to get money. Circle, the company which runs the USDC stablecoin, has earmarked Venezeulan funds for healthcare workers. The country, hard hit by the COVID-19 pandemic, has also seen a dearth of supplies and runaway inflation. Workers have few sources of income.
In a post on its website, Circle briefly explained how the system of distributing aid works. The US Federal Reserve and Treasury will take funds that had previously been seized from Maduro’s government and transfer them to Guaidó via a US bank.
With US dollars virtually in hand, but several borders away, Guaidó will be able to mint USDC and send it to the Airtm exchange. From there, Venezuelan health care workers can claim their funds as “AirUSD”. This stablecoin will be available for withdrawal to the recipients.
The move, Circle seems to admit, is a way of bypassing Maduro’s regime, which controls banks in the socialist country. Circle is framing the move as a way to reward workers risking their lives in the hard-hit nation. The aid is said to number in the millions of dollars.
Both impressive and scary. The US is now officially exporting dollars to third-world countries via crypto rails. https://t.co/JNuw3wAzYA
— Hasu (@hasufl) November 20, 2020
Jeremy Alliare, co-founder of circle, touted this use case of cryptocurrencies on Twitter. Hasu, a crypto researcher, replied that the US sending funds to other countries via crypto is both, “Impressive and scary.”
In 2019, Washington broke ties with Maduro’s government after calling the presidential elections there “fraudulent”. On Nov 19, 2020, the US decided to send its first ambassador in a decade to the South American nation.
After president-elect Joe Biden’s win on Nov 9, 2020, Maduro told the media he wished to resume a “decent” dialogue with the US.