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This Crypto Collaboration Aided Health Staff Beaten By Venezuelan Regime

As Venezuelans have struggled to survive the pandemic during times of dictatorship, the crypto company Circle collaborated last year with the countries’ opposition to financially aid healthcare workers who were abandoned to a broken-down system with almost no proper medical equipment and a discouraging $15 a month salary.

Today $1 equals 45,000,000,000,000,000 bolivars –although it has been devalued to look like 4,5 VES–, a cipher too large to comprehend, much like the general panorama. The basic food basket is calculated over $300 a month, but the minimum wage is roughly $7, and last year many doctors were making as much a $15 a month.

Financial Times published a report where they describe the methods used by the interim president to bypass the Maduro regime’s tight grip that would not allow citizens to receive any type of external aid.

As Gideon Long’s report remembers, the U.S. sanctions on Venezuela had made the situation worse for its citizens with the state funds frozen in U.S bank accounts, but the politicians who oppose the government –with Guaidó recognized by Washington as Venezuela’s legitimate president– found leverage in that by managing to access the accounts after convincing the US Treasury of doing so.

But how would they get the money to the health carers’ hands if the government was extremely against it? Legitimized or not, Venezuela is still under Maduro’s control, so the banks were not a possibility, but stablecoins were. During the bumpy road, the crypto era opened a pathway that wouldn’t have been there a decade ago.

Circle, U.S.–based fintech innovator Airtm and Juan Guaido’s team collaborated in what they claim to be the first “use of stablecoins for foreign aid“, the “only viable option available”.

Circle says on its website: “we were able to put in place an aid disbursement pipeline that leveraged the power of USDC — dollar-backed, open, internet-based digital currency payments — to bypass the controls imposed by Maduro over the domestic financial system and put millions of dollars of funds into the hands of people fighting for the health and safety of the people of Venezuela.”

Maduro’s regime did its best to block the Airtm platform, where healthcare workers would receive the aid, but Guaidó’s team published a guide on how to use the Canadian company TunnelBear’s VPN, which provided free services for a while.

Many countrymen have said that not much changed for Venezuelans either way but at the same, the landmark that collaborations like this ones create show the possibilities that the crypto era we are entering can offer in situations of despair. It’s not all about the market, it’s also about freedom.

Related Reading | Venezuelan Airport To Accept Payment In Bitcoin

Inside The Effects Of Crypto

As the countrymen were already in a heartbreaking situation, the times of Covid came around and Venezuela entered deeper despair. Numbers on deaths cannot be officially traced because the regime covers them up to make itself look better, and all we are left is with the abandoned voices of its victims.

A New York Times report on childbirth in Venezuela amidst a shattered system.

Guillermo Herrera Gallo, a Venezuelan doctor that currently works for the Red Cross in the country, was one of the health workers to receive the bonus. He made comments to newsBTC about his personal experience regarding the financial aid through the decay of Venezuela’s health system.

Herrera said that the aid didn’t make much of a difference for the lives of doctors, but he did see relief in the eyes of nurses who could finally afford a better meal and supplies for their children. He thinks that the method and platform used were strongly beneficial when facing a national currency devaluation that has become useless and was pleased with how secure using AirTM feels like.

Circle adds that this event remarks “the freedom of people to transact, even in the face of brutal dictatorships. It also marks a historic moment where in order to execute on foreign aid objectives, economic and political leaders have turned to stablecoins. ”

Related Reading | How Bitcoin is The Answer To Venezuela’s Stuck-At-Sea Oil Supply

Crypto total market cap down to $2,2 trillion in the daily chart | Source: TradingView

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Is Hyperinflation Inevitable? Jack Dorsey Says It’ll “Change Everything”

When Square’s boss Jack Dorsey talks about hyperinflation, the world listens. And Twitter reacts. Since so-called developed economies are now feeling the pain that inflation brings, the concept is in everyone’s mind. Every human has a front-row seat to witness the consequences of the United State’s relentless money printing. And, since the Dollar is still the reserve currency of the world,  they’re all feeling it too.

Related Reading | Bullish For Bitcoin: US Inflation Expectation Breaks Out From Decade Long Downtrend

This is Jack Dorsey’s tweet:

Hyperinflation is going to change everything. It’s happening.

— jack⚡️ (@jack) October 23, 2021

As you can see, he doesn’t merely talk about inflation. He goes for “hyperinflation,” which caused adverse reactions in the replies and the quoted tweets. They accused him of fear-mongering and quoted official numbers at him. And the nay-sayers probably have a point here, because the US is far removed from the reality that word implies. However, one thing’s for sure: money printer goes brrrrrrrr… and it hasn’t stopped working since Covid hit.

Negative And Moderate Reactions To Jack Dorsey‘s Tweet

This is an example of an unnecessarily insulting response from a traditional finance person. 

2/ step back and it’s disturbing that a lot of most powerful financial figures/oligarchs are invested, literally and figuratively, in various huckster schemes and libertarianish fantasies of state and civilizations collapse.

— Josh Marshall (@joshtpm) October 23, 2021

This man has obviously not done his homework regarding Bitcoin, so his argument is invalid. And doesn’t require a response. Plus, he’s being insulting to get attention, which he got. So, good for him and his dopamine levels. Let’s hope he has fun staying poor.

This is a Venezuelan economist with a moderate answer to Jack Dorsey.

I don't think it will. But it doesn't need to happen for things to get ugly. https://t.co/Cj85mJ8o7x

— Eduardo Gavotti (@EduardoGavotti) October 23, 2021

Since Venezuelans have first-hand experience with hyperinflation, let’s take what he says into account. The US is just feeling what inflation does. So-called developing economies live with that concept on their backs every second of every day.

BTC price chart for 10/23/2021 on Bitstamp | Source: BTC/USD on TradingView.com
Informative Reactions To Jack Dorsey’s Tweet

The Human Rights Foundation’s Alex Gladstein, a notorious Bitcoin maximalist, had this to say to Jack Dorsey.

Those shocked by this tweet live in a bubble of financial privilege.

*1.3 billion* live under double, triple, or quadruple-digit inflation: Turkey, Nigeria, Ethiopia, Iran, Lebanon, Venezuela, Cuba, Sudan, and beyond.

It’s already one of the world’s biggest humanitarian crises. https://t.co/P83opDagdu

— Alex Gladstein 🌋 ⚡ (@gladstein) October 23, 2021

He’s not lying. Hyperinflation is “already one of the world’s biggest humanitarian crises.” However, the US is far away from “Turkey, Nigeria, Ethiopia, Iran, Lebanon, Venezuela, Cuba”, and Sudan’s situation. And, since the Dollar is still the reserve currency of the world, they have a comfortable cushion to resist the constant money printing’s effects.

Serial entrepreneur and former Coinbase CTO, Balaji Srinivasan, answered Jack Dorsey with a fully-fledged idea. A “censorship-resistant inflation index.”

I wrote a spec for a censorship-resistant inflation index. It’s framed for a startup, but Square could easily do this. In a crisis, accurate inflation info would be something people checked Twitter for every day. @milessuter @moneyball @jack https://t.co/SYb2mfxjex

— Balaji Srinivasan (@balajis) October 23, 2021

In the project, he brings forth some hard truths:

“If inflation is a government-caused problem, we can’t necessarily rely on government statistics like the CPI to diagnose it or remediate it. Indeed, in places with high inflation, censorship and denial is the rule rather than the exception.”

If you are technically capable, there’s still time to send your proposal and earn “A $100k Prize for a Decentralized Inflation Dashboard.” Be aware that “if you use Chainlink’s oracle tech in your project, the best dashboard will be eligible to receive a $100k grant in LINK tokens.” Those tokens are in addition to the main prize.

Poor Understanding Of The Terminology

In a Twitter Spaces room specifically dedicated to Jack Dorsey’s tweet, notorious podcaster Preston Pysh concluded.

“I think people’s understanding of the terminology, deflation, inflation, is just grossly misunderstood. And so, when you say we’re going to have these deflationary events that are then going to lead to more QE, which is then going to result in more inflationary events. I completely agree with you, but we’re talking that there’s so much information loss in such a simple word as deflation and inflation. So the deflationary event is that this whole system is constructed as credit.”

When he says QE, Preston refers to Quantitative Easing, which Investopedia defines as:

 “A form of unconventional monetary policy in which a central bank purchases longer-term securities from the open market in order to increase the money supply and encourage lending and investment. Buying these securities adds new money to the economy, and also serves to lower interest rates by bidding up fixed-income securities.”

Related Reading | Jack Dorsey Plans to Build A Decentralized Exchange For Bitcoin

That being said, Preston asks:

“How many people in the US, or in the world, have that context when that’s not their expertise, right? They didn’t get a major in macroeconomics, or finance, or whatever. So, it’s just all buzzwords that people throw around. And, in the meantime, no one really even understands what those definitions even represent.”

For more information about inflation, check out the Bitcoinist Book Club analysis of Saifedean Ammous’ “The Bitcoin Standard.”

Featured Image by Gerd Altmann from Pixabay – Charts by TradingView