- Why the U.S. government was forced to turn to stablecoins in order to transfer money to beneficiaries in Venezuela. Another company turns all its cash into Bitcoin.
The US exchange Coinbase and its subsidiary Airtm worked with the US government to distribute $18 million. This amount is said to have been seized by the Maduro government of 62,000 Venezuelan health workers.
In order to reach the beneficiaries, the traditional banking system was not used. They were sent to stablecoins, i.e. cryptocurrencies that have a locked exchange rate with the dollar. But the difference with “normal” dollars is that their circulation cannot be hindered. Beneficiaries will reportedly receive $300 each for three months in equal installments.
The Venezuelan government tried to block access to Airtm but failed. Instructions on how to circumvent the blockade and receive the money were immediately released. Airtm is headquartered in Mexico City, but 65% of its customers come from Venezuela. That’s where Venezuelans usually exchange bolivars for bitcoin and dollars.
The US side claims that the money was unfairly seized and that the workers fell victim to the corruption of the regime. Obviously there are political purposes behind this action, which we will not consider as they are not the subject of the column.
What matters most is that for the first (obvious) time the US government has used cryptocurrencies as leverage in another state.
The incident also demonstrates that cryptocurrencies can not only be used as a tool to circumvent banking systems, and cannot be blocked by governments.
The existence of bitcoin and other cryptocurrencies others find it liberating or normal. Others, terrifying. They’re worried about the idea that there’s the possibility of defying the principles.
They used to see with embarrassment that over the Internet anyone can send anything to anyone. Whoever it is, un audited, uncertified, uncensored, uncensored, without a sender’s or recipient’s identity. Regardless of age, nationality, gender, color, race, religion, sexual preferences or political beliefs.
Especially the generation that grows alongside the internet believes that this is how the world should work. Bitcoin applies precisely this principle, except that in addition to freedom of information exchange it also distributes money. As a child of the Internet, bitcoin inherited the basic principle of neutrality and strengthened it with more freedom.