US Government to Use USDC Stablecoin to Bypass Venezuela’s Maduro

In letter

  • The US recognizes Juan Guaidó and not Nicolás Maduro as the rightful President of Venezuela.
  • Maduro has blocked the government-in-exile’s access to cash, but Guaidó has access to funds confiscated from the Maduro regime in the United States.
  • Circle is helping to channel these funds to Venezuelan health workers with its USDC stablecoin.

Circle, which co-publishes the USDC stablecoin with Coinbase, announced today that it has coordinated with the US government and the Airtm crypto-exchange in Latin America to direct aid to Venezuelan health workers through the Latin American country’s government-in-exile.

Venezuela actually has two presidents. In one camp there is Nicolás Maduro, the socialist leader who has been in power since 2013. In the other is Juan Guaidó, chairman of the National Assembly, who proclaimed him acting president in January 2019; Over 50 other countries recognized him as a legitimate ruler, including the United States, which had simultaneously imposed sanctions on the Maduro regime.

As a result, Maduro Guaidós has restricted access to cash.

Circle said the company has now stepped in to raise funds for Venezuelan healthcare workers as the country has been hard hit by COVID-19.

The system will work like this:

“The US Treasury Department and the Federal Reserve release seized funds into the Guaidó government’s account with a US bank. The Guaidó government then uses these funds to mint USDC. The USDC is then sent to Airtm.”

Once the USDC stablecoins hit the Airtm wallets, they will go to Venezuelan health workers in the form of AirUSD, Airtm’s own Fiat-backed stablecoin. Recipients can then withdraw from banks, transfer money or spend online.

According to Circle, this will “bypass Maduro-imposed controls on the domestic financial system and put millions of dollars in funds in the hands of people who fight for the health and safety of the people of Venezuela.”

Alejandro Machado from Open Money Initiative and Valiu spoke Decrypt, “I think all the efforts that result in more Venezuelans having more control over their money are worth it. Helping the health workers in particular is one of the best things anyone can do in the middle of a pandemic – most of them make less than $ 3 a month. “

Not everyone thinks it’s a great idea. Crypto researcher Hasu said: “Both impressive and scary. The US is now officially exporting dollars to third world countries via crypto rails.”

The finance department actually was send money to Venezuelan health workers since September – using the funds confiscated by the Maduro government.

But getting money into Venezuela was a problem. Although the Trump administration gave Guaidó control of the Venezuelan government’s assets in the US in 2019, according to Larry Kudlow, director of the National Economic Council, the US was investigating “banks, iPhones, apps and many clever ways to get Guaidó” .

Now it looks like the US government has found a way to feed the opposition money. However, the plan is heavily dependent on Airtm, which has been blocked in Venezuela since 2018.

“”Our web app continues to be blocked by local ISPs in Venezuela. With a VPN-enabled system, Venezuelans can easily avoid this blockade, “said an Airtm spokesman Decrypt. “”We also recently released ours Airtm Android app, specially designed to prevent these accessibility issues in the future. “

Neither the US Treasury Department nor the Federal Reserve have responded yet DecryptPlease comment.