Crypto firms work with Venezuela's government-in-exile to disburse funds to health care workers
Venezuela's opposition government-in-exile is working with crypto firms Circle and AirTM to distribute funds to health care workers in the South American nation, Circle said in an blog post on Friday.
Circle said the arrangement constituted "a collaboration with the Bolivarian Republic of Venezuela, led by President-elect Juan Guaidu00f3, U.S.-based fintech innovator Airtm, and coordination and licensing with the US government."
Guaidu00f3, the president of the National Assembly of Venezuela, was declared the acting president of Venezuela in January 2019 following a widely-disputed election held the year before. Venezuelan president Nicolu00e1s Maduro was accused of rigging the election to hold on to power.
In the time since, Guaidu00f3 has won recognition from dozens of countries since, including the United States. The Trump administration has provided degrees of support to the Guaidu00f3-led government-in-exile. Yet the US governments efforts have thus far failed to push president Nicolu00e1s Maduro out of office despite worsening socio-economic and health conditions in the country.
According to Circle's blog, the new aid pipeline distributes funds seized in the U.S. from the Maduro regime and awarded to the Guaidu00f3-led government and, via AirTM's service, distributes them to those on the front lines of Venezuela's fight against the coronavirus. Notably, it involves a pair of stablecoins as part of that process.
As Circle explains:
"In this new aid delivery flow, the US Treasury and Federal Reserve releases seized funds to the Guaidu00f3 government's account at a US bank. The Guaidu00f3 government then uses those funds to mint USDC. The USDC is then sent to Airtm, a bank-and-blockchain connected dollar-denominated payment platform that powers digital dollar payments throughout North, Central, and South America. Airtm's network of dollar-to-anything forex agents enables withdrawals to local currency in Latam bank accounts at free market (vs. government-rigged) rates. Once the USDC is received on Airtm wallets, it is then dispersed to accounts of Venezuelan healthcare workers as AirUSD (Airtm's stablecoin-backed dollar token). The healthcare workers are then able to withdraw to their local bank accounts as bolivars at free market rates, send to other users, or even spend the funds online anywhere using Airtm's virtual debit card - bypassing the need for a bank at all. With over half a million users in Venezuela, Airtm's network is big enough to support enough peer-to-peer transactions to make this a viable solution for day to day transactions such as paying rent."
The U.S. government moved to seize the Maduro regime assets and funds in August 2019, months after Guaidu00f3 was declared acting president, as Reuters reported at the time.
An August 2020 report from the Washington Post said that the U.S. government had seized some $300 million and that it was using some of those funds to fuel its anti-Maduro efforts - including disbursements to health workers.
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