Circle’s USDC Stablecoin Being Used to Help Venezuelans Tackle Hyperinflation

Circle, the payments fintech startup is working closely with those in power.

Helping the Needful with USDC

US dollar-pegged stablecoin, USDC issuer, Circle is working with the US government to circumvent Nicolas Maduro and directly support the Bolivarian Republic of Venezuela led by Juan Guaido.

Per sources close to the matter, Circle is using USDC it issues with major US-based cryptocurrency exchange Coinbase in a bid to distributed relief funds to medical workers and others impacted by the rampant hyperinflation and coronavirus pandemic in the South American country.

Speaking to Coindesk, Jeremy Allaire, CEO, Circle, noted:

“The partnership, obviously, is with the exiled government.”

Adding:

“The history here is many countries, including the United States, recognize President-elect Juan Guaidó as the president of Venezuela. Maduro did not accept the results of an election and maintained power.”

For the uninitiated, according to a BBC report published earlier last year, Maduro was declared an “usurper” by the Venezuelan national assembly which named Guaido the interim president in January 2019.

How Does it Work?

Per Circle’s official blog post, the US Treasury Department and the Federal Reserve deposit funds seized by the nation into a bank account in the US associated with the Guaido government. Later, the funds are converted into USDC that are then sent by Circle to Airtm.

As told by Allaire, Airtm has a business account with Circle under the terms of the arrangement. Subsequently, funds flow from Circle to Airtm which, in turn, distributes the same to any of its mobile digital wallet users. At present, Airtm has “half a million users in Venezuela,” as stated by Allaire.

He added:

“This, I believe, marks really a first where the U.S. is effectively executing a global foreign policy objective with stablecoins for foreign aid because the existing dollar banking system can’t do the job.”

This way, Circle and other companies associated with the whole operation enable Venezuelans to spend in dollars, a currency far more stable than the bolivar which has crumbled under the nation’s unchecked hyperinflation.

Allaire concluded:

“In this case, because it’s a dictatorship, you also have a VPN and you have digital currency. You can go over the top of the internet and bypass those controls.”