💸💪🏾Moneda Moves (27): Re-evaulating crypto for Venezuela🤔
Llegamos a viernes, mi gente! Today, we are talking about Venezuela, and what kind of solution (?) an alternative currency like crypto offers.💰
If you've been reading about the economic state of affairs in Venezuela, you know that inflation has wreaked havoc on the country. A cup of coffee this March cost 2,800 bolivars, that's up from .75 bolivares just one year ago. Millions of Venezuelans have fled due to the unsustainable economic environment and crime rates.
This week, a story that should feel like somewhat of a win about giving aid to Venezuela fell flat to me. A Silicon Valley-based startup by the name of GiveCrypto addressed the economic crisis in Venezuela by donating cryptocurrency to hundreds of families this year, as reported in the Associated Press. This meant that citizens like Andreína Cordero could finally feed their families chicken and vegetables after long stints of a strict beans, rice and pasta diet.
That sounds like good news...until you learn that the donations were merely a three-month trial, or "experiment" to promote the use of cryptocurrency in Venezuela. Using crypto in Venezuela is not new. The idea behind using alternative currency is to avoid hyperinflation. But storing crypto has risks of its own including bearing the swings of certain crypto assets. The currency is also not the most street friendly way to make purchases in Venezuela, since there's no open crypto exchanges or easy to pay with crypto, as CoinDesk points out. Combine that with the fact that this program appears to descend upon desperate families with a not highly accessible kind of currency for a limited trial period, and you start to wonder whether initiatives like this truly do the locals a service.
Crypto does posit a possible way to deliver aid to Venezuela, but as CoinDesk's Diana Aguilar writes, it doesn't work without strategy and in isolated, experimental instances. Sound familiar? It sure did to me. Band-aid responses and experimental reactions to structural issues are what have made NGOs unsuccessful and at times problematic.
This makes me wonder how we should be thinking about crypto in Venezuela. Have a take on the matter or expertise? Drop me a line. Let's talk.
Onto more highlights from the week!
Con poder✊🏽,
Lyanne
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That's a wrap for this week. Thanks for reading, familia! Enjoy the long weekend. Hasta la proxima...