Colombia’s cross-border remittance startup Valiu has released synthetic dollars backed by Bitcoin to give Venezuelans access to stable assets and avoid hyperinflation that affects the economy.
It is still in Alfa, but Valiu has partnered with the Latin American food delivery app Rappi, which could offer a large user base to help with the launch when it is fully deployed later this year.
April 23 Valius managing director, Simón Chamorro, posted on Twitter that the company’s “crypto dollar” was released in alpha::
“After 4 months of working over 80 hours, more than 500,000 lines of clean code written by 4 engineers who relocated the company to Total Remote due to COVID and carried out a rigorous regulatory analysis … I’m proud to say that Valius Crypto Dollars now live and work at Alfa. “
Valius’ synthetic dollars are stored in a smartphone wallet application and can be sent to Venezuelan users without paying anything. Bitcoin supports synthetic dollars. However, users without knowledge of cryptocurrencies can easily buy and transfer crypto dollars by depositing cash at one of thousands of Valiu transfer partners in Colombia.
Sid Ramesh, an early stage consultant, published a Video In which the operation of the application is described in detail, in which Chamorro sends a crypto dollar from his smartphone in less than 30 seconds.
Crypto dollar as a solution to hyperinflation
Valius CEO has described a recent influx of Venezuelan migrant workers coming to Colombia as inspiration for the crypto-dollar project. Many used a risky black market for transfers that developed due to the increasing capital control of Western Union and MoneyGram.
Valiu has been offering Venezuelan transfers in Fiat currency for seven months. Hyperinflation, however, resulted in recipients having fewer bolivars when they arrived.
“99% of transfers are still arriving in Bolivar,” Valiu research chief Alejandro Machado tweeted earlier this month. “Dollar cash hardly crosses borders, especially in the midst of closings #COVID ー 19th. “
While Venezuelans are suffering from hyperinflation, some experts believe that the United States and Australia are currently heading for deflation due to the blockage in demand.