USDC, a dollar pegged ethereum based token with a current market cap of $2.7 billion, has been used for the first time by the American government to enact foreign policy.
Jeremy Allaire, the CEO of Circle which created USDc together with Coinbase, stated “stablecoins are now a tool of US foreign policy.”
In a fairly detailed description, Circle says they partnered with the Bolivarian Republic of Venezuela, led by President-elect Juan Guaido, and U.S.-based fintech innovator Airtm to bypass the Maduro government to deliver aid to Venezuela with America’s backing:
“In this new aid delivery flow, the US Treasury and Federal Reserve releases seized funds to the Guaidó government’s account at a US bank. The Guaidó 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.”
As you might remember there was this whole political standoff last year where Maduro’s government wouldn’t let in American aid.
Analysts suggest Maduro maintains some popularity due to handing out food ...