Send knows conversion and payments are its biggest friction points, but there’s no one surefire way to bridge that gap. That’s why Send is partnering with payment networks, recruiting WeSend agents, and lobbying local businesses to accept SDT. The startup isn’t sure which way will work.
Robert Greenfield of ConsenSys agrees that stablecoins or semi-stable coins like Send might hold the most promise as crypto solutions for starving economies like Venezuela’s. “Stablecoins can start to enable more frictionless remittances in the way people were promising when Bitcoin came out 10 years ago that really didn’t materialize,” he said.
The value starts with international transfers and asset conversion protected from hyperinflation, but ultimately, he said, you still run into the crypto-to-cash problem. The issue comes when businesses want to convert crypto into an asset they can use to actually pay the bills and don’t have a payment gateway to do so.
“Crypto-to-cash involves creating networks of communities that allow these transactions. This could be done through networks of vendors who accept it [and] who can afford that type of risk, or through community and rural banks accepting these types of stablecoins,” Greenfield explained.
He believes we need to rethink the financial tools available for unbanked or underbanked populations. For better or worse, other countries will learn from how cryptocurrencies are used in first-mover countries like Venezuela.
When the Petro-backed Bolivar Soberano begins circulating later this month, it will mark the first time a nation’s official currency is tied to crypto. Maduro has ordered government services, the tourism industry, airlines, and border gas stations to start accepting cryptocurrencies. The government is also touting the Petro as a funding mechanism for many of the nation’s Bolivarian Socialism programs, including homeless housing projects and youth initiatives. Maduro has even spoken about universities running crypto mining farms to support the national economy.
“We’re setting a precedent in terms of economic sanctions and repercussions towards the misconceived usage of digital assets, which in turn will make laws against crypto in the west pretty strict,” said Greenfield. “I think what we don’t understand is how we’re opening the door for cryptocurrencies to be used in ways we don’t want them to be used.”
Venezuela is a powder keg for the duality of this still-young technology. The government has embraced cryptocurrency as an answer to hyperinflation and sanctions, exerting centralized control over how it’s used to ensure the Petro’s supremacy. At the same time, the Venezuelan people endure crackdowns and persevere, seizing upon the crypto’s decentralized nature to hold onto a shred of control over their own money.
All the while, everyday living conditions are deteriorating. Crime rates have soared, the nationalized oil industry continues to collapse, and power and internet outages have grown more frequent, and often last for multiple hours a day. For many, the best course is escape.
A few weeks ago, Elisa joined the more than a million Venezuelans who have fled over the border to Colombia in the past two years. She left for a better life but also out of fear of the government’s ongoing raids and detainments targeting the crypto community.
She’s now based in Bogotá and working full-time for Send on administrative tasks and human resources, though she’s still helping coordinate the Send ambassador program. She’s been sending food and money back to Venezuela and is working on a plan to get her husband and son out of the country soon.
“I have an 11-year-old son, and I have to go back for him. I’m scared, because I don’t know if they are going to let me out again or if Colombia is going to let me back in with my whole family, but it’s a risk I have to run,” she said.
On her first day in Bogotá, Elisa walked into a supermarket. She saw toilet paper on the shelves, after years of massive shortages. For the first time in almost a decade, she saw an aisle full of liquid milk. She had drank only powdered for as long as she could remember.
“When I went into the supermarket, I cried,” she said. “It was full of food; full of everything I needed…fruit, rice, flour for arepas. I felt like I was dreaming.”
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