US government engages stablecoin issuer USDC to support the opposition in Venezuela

The USDC issuer Circle announced a collaboration with the US authorities to distribute cash payments among healthcare workers in Venezuela, circumventing restrictions imposed by Nicolás Maduro’s government.

Honored to work with the Bolivarian Republic of Venezuela, US government and Airtm on this important initiative to bring aid to the people of Venezuela w/ USDC stablecoin https://t.co/Y7Pe35rAWw @circlepay @theairtm @jguaido

— Circle (@circlepay) November 20, 2020

Earlier this year the opposition led by Juan Guaidó, was planning to distribute $18 million among 62,000 healthcare workers facing difficulties amid the fight against the COVID-19 pandemic.

The funds slated for disbursement were seized from the government of incumbent President Nicolás Maduro by the US authorities. For their distribution, the Mexican exchange AirTM was chosen. Shortly after, access to the platform was restricted within the country.

Nevertheless, the US authorities did not abandon their plans. The Department of Justice and the Federal Reserve are now transferring the seized funds to a bank account associated with the Guaidó government, after which they are converted into USDC. Circle subsequently sends the coins to AirTM, where they are converted into the exchange’s issued stablecoin AirUSD and distributed among healthcare workers.

Despite the exchange being blocked in Venezuela, access can still be gained via a VPN. Purchases and services funded with the aid can be paid using AirTM’s virtual card, and funds can be sent to a local bank account or to another user.

“This is a way to bypass the state-controlled banking system and distribute money directly to people. This is the first instance of the United States pursuing its goals in international policy through a stablecoin, because the existing banking system is not able to do so,” said Circle CEO Jeremy Allaire.

The Maduro government is also considering cryptocurrencies as a means to circumvent sanctions. A related bill presented by the Venezuelan president in September.

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