The US government is using the USD Coin (USDC) stablecoin as a weapon against Venezuela’s government.
“The US Treasury and Federal Reserve releases seized funds to the Guaidó government’s account at a US bank,” a Circle press release claims. “The Guaidó government then uses those funds to mint USDC. The USDC is then sent to Airtm.”
Juan Guaidó is one of two men who claim to be Venezuela’s president. Venezuela’s National Assembly declared Juan Guaidó president in 2019. However, Guaidó’s rival Nicolás Maduro still controls Venezuela’s government because he has military backing.
Over 50 countries including the United States recognize Guaidó as Venezuela’s president. Maduro limits Guaidó’s access to cash.
The US Treasury has been sending funds seized from Maduro’s government to Venezuelan healthcare workers since September, Decrypt claims. The Donald J. Trump (R-Florida) administration gave Guaidó’s shadow government control of Venezuelan government assets in the United States in 2019.
The Venezuelan government has blocked Airtm’s web app since 2018. However, Airtm claims Venezuelans can use Airtm wallets through a virtual private network (VPN).
If Decrypt’s claims are true, the US Treasury is attempting to undermine Maduro’s government. To explain, hyperinflation makes Venezulea’s currency the bolivar worthless, leaving many Venezuelans; including healthcare workers, with no money to buy food.
Guaidó is trying to buy the support of healthcare workers and their patients with the stablecoins. I think the organizations behind USD Coin; Circle and Coinbase, Airtm, and the US Treasury are violating Venezuela’s sovereignty, if Decrypt’s claims are true.
Furthermore, you could consider the Airtm use an act of war against Venezuela. Hence, you can argue Maduro has the right to retaliate against the United States.
The US government could be weaponzing cryptocurrency to wage a covert war against Maduro. Okay, I consider Maduro an incompetent clown and his Bolivaran revolution a grim joke. However, Maduro is a Venezuelan problem for the Venezuelan people to solve.
The United States cannot start removing terrible governments in other countries. Notably, the United States lacks the resources to remove and replace every horrible government. Second, America’s recent efforts to remove and replace terrible governments in Afghanistan, Iraq, Libya, Syria, and elsewhere were dismal failures.
America needs to get out of the nation building business and solve its own problems. I think a better use of the US Treasury’s resources and America’s technological prowess is to send cash to the 50 million Americans Feeding America claims suffer from Food Insecurity. Why are US government resources being used to help hungry Venezuelans when Americans are going hungry?
The dangers from Weaponizing Stablecoins
One potential result of weaponizing stablecoins will be for governments to ban them as threats to national security. Sadly, the US government proves stablecoins threaten national security.
Another result could be for governments to retaliate against the United States. The Venezuelan government could send millions of dollars’ worth of stablecoins to American troublemakers such as the Proud Boys, QAnon, or Antifa, for instance. Members of those nut groups could use the stablecoin funds to buy guns and launch terrorist attacks.
A stablecoin is a cryptocurrency that contains a digital mechanism that can release fiat currency from a bank account. Weaponizing stablecoins is a terrible move because stablecoins can give people in developing nations with lousy currencies access to sound money and the world banking system.
Stellar creates Stablecoins for Argentina and Brazil
Hence, stablecoins could be an important tool for bringing people into the global financial system. For example, the Settle Network is issuing Stellar stablecoins for Argentina and Brazil, Decrypt claims
They will tie Settle’s ARST stablecoin to the Argentine peso and Settle’s BRLT stablecoin to the Brazilian real. The hope is that Argentines and Brazilians living abroad could use ARST and BRLT to send remittances to family back home.
Remittances are big business; the World Bank predicts people will send $445 billion in remittances to people in developing countries in 2020. Theoretically, stablecoins could make remittances easier by allowing people to get cash from ATMs
The US government’s clumsy conspiracy with Guaidó threatens an important tool for helping the poor in developing countries. Hopefully, President Joe Biden (D-Delaware) will shut down this effort and break off ties with Guaidó when he takes office.
I hope the US government has not launched an age of cryptocurrency warfare. America needs to be careful here because other countries such as China could use the same tactics against the United States.