Circle has partnered with the Bolivarian Republic of Venezuela and Airtm to distribute its USDC stablecoin. The initiative was organized with the support of the United States government and was conceived as a possible solution to Venezuela’s economic difficulties. The country has been suffering from hyperinflation since 2016, partly caused by the controversial President of Venezuela, Nicolás Maduro.
The country’s troubles accelerated this year with the emergence of the coronavirus. Hyperinflation has had a particularly disastrous effect on doctors and patients, who in many cases have found that their resources have become unusable. In this regard, Circle’s USDC coin can help in such a scenario as it is a stable coin.
This means that its value is pegged to the US dollar, so it won’t experience the same price change as the Venezuelan bolivar. Since it is a digital currency, it is easier in many ways to distribute it to those who need it urgently..
Circle is working through the parallel government of Juan Guaidó
The Circle collaboration was led by the president of the country’s parallel government, Juan Guaidó, and the US cryptocurrency exchange Airtm has also shown its support.. In the meantime, the US government provided “coordination and licensing”.
An explanation on the Circle blog describes how help is distributed. The initiative involves the US Treasury Department and the Federal Reserve handing over funds to the Guaidó government, which they then use to mint the USDC.
How will it work?
This will then be sent to Airtm, where it will be distributed to the wallets of Venezuelan healthcare workers as AirUSD, an Airtm supported stablecoin. From there it can be withdrawn at the free market price in Bolivar.
As Airtm has its own virtual debit card, no interaction with a Venezuelan bank is required. Airtm currently has around 500,000 users in Venezuela, so the app is expected to be a kind of lifeline at such a crucial stage.
It is also a major turning point for Airtm. In August alone, the Maduro government was responsible for preventing the exchange from distributing $ 18 million in relief supplies. This is just one example of the party’s dubious policies that have been scrutinized by the rest of the world since the beginning of the Venezuelan crisis.
The club is also the first of its kind in history. A digital stablecoin has never been used for foreign aid in the past, let alone through US government distribution.
Circle concluded the collaboration announcement with a positive view of the future potential of stablecoins:
“”This is the first time, but it will certainly not be the last. arrive firmly on the world stage as global stable coins as a fundamental infrastructure in the future of the international monetary system. “