Circle, the issuer of the stablecoin USDC, recently announced that it cooperated with the U.S. government for the first time to use the stablecoin USDC anchored to the U.S. dollar to bypass the current Venezuelan President Nicolas Maduro (Nicolas Maduro), support the opposition Juan Guaido, and send Venezuelan medical staff and other local residents distribute relief funds.
At the beginning of this year, the new crown pneumonia epidemic spread globally. The Maduro government applied for a US$5 billion anti-epidemic aid loan to the International Monetary Fund (IMF) for the purpose of implementing preventive measures. Acknowledge the denial of its request.
Dating back to early 2019, the Maduro government announced the severance of diplomatic and political relations with the US government and demanded that the US withdraw from Venezuela within 72 hours. At the same time, the opposition Juan Guaido declared himself an "interim president" and no longer recognized Maduro as president. This decision was recognized by the United States, the European Union and other national organizations.
On one side is President Maduro, and on the other side is the opposition Guaido with the backing of the United States. The peak confrontation between the two factions divided the dual power centers into different camps, and the turmoil and anxiety caused by the reorganization of forces and the competition for spheres of influence permeated everywhere. The two factions of the government and the opposition "ridden the tiger", and the political civil strife in Venezuela kicked off.
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The country's "petroleum currency" is cold, how does the outsider's stable currency join the committee?
At the beginning of 2018, Maduro proposed to abolish the "hegemony" of the U.S. dollar, and use the petro currency based on the 5 billion barrels of oil reserves in the Ayacucho block No. 1 oil field in the Orinoco heavy oil belt to make Venezuela's economy Get reborn. Subsequently, the first legal digital currency - "Petro Coin" (Petro Coin) came out.
It has been nearly three years since Venezuela launched the petro. However, although the Maduro government has been trying its best to promote the petro currency and forcibly integrate it into the daily life of residents, the petro currency has not opened up the economic market in Venezuela.
In addition to factors such as disapproval by other mainstream countries in the world, low credibility of the local government, and local residents' preference for a stable international currency, the petro currency itself is not yet perfect for large-scale payment at the technical level; secondly, petro The currency value is not stable enough.
External funds cannot come in, internal funds cannot go out, and the French currency bolivar stored in the bank faces the risk of pouring out at any time. This is the current situation in Venezuela.
The masses in Venezuela urgently need a borderless and stable cryptocurrency to tear a hole in Venezuela, which is isolated from the world; powerful countries outside Venezuela hope to use the natural globalization of cryptocurrency to accelerate the penetration of strong legal currencies.
In 2019, Venezuela experienced a crazy inflation, with an inflation rate as high as 10,000,000%, and the local currency depreciated to nothing. People did not hesitate to be arrested by the police to mine bitcoins to obtain economic income, but the value of bitcoins fluctuated too much. Big, which makes it more of an asset, a stock, than a currency.
The stable currency not only has the core technical advantages of Bitcoin - speed, no borders, but also has the advantage of currency stability that Bitcoin lacks, which makes it more likely to replace Bitcoin in these countries with high inflation. . Just imagine, with a stable currency anchored to a strong legal currency, if inflation occurs, people will tend to convert their assets into such encrypted assets.
Just as Wang Xing, the founder of Meituan, commented on Facebook’s proposed Libra in Fanfou: “The strategy is very clear, and the persimmons are soft. First gradually replace the currency systems of weak countries among the 200 countries in the world, and encounter very few strong countries. Of course, if you should bow your head, you should bow your head, and if you should collude, you will collude."
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Can the Chosen One USDC stabilize the hegemony of the US dollar?
Why can USDC become the chosen one?
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The four points of speed, borderless, stable currency value, and large market share are the advantages of USDC, which are very attractive to people in countries with high inflation. For the United States, USDC has formed an alliance with the digital dollar , It is different from the traditional dollar, its essence is mathematics, other countries can govern the traditional dollar through the border, and prevent the entry of the dollar through financial control, but the digital dollar breaks the barriers of the border, making it easier to infiltrate any country.
On the one hand, the use of USDC will help the relevant departments of the United States to monitor and control the flow of funds, and strengthen the actual control of the opposition Guaido; on the other hand, it is to bypass the government's foreign exchange policy controls and weaken the sovereign economy ability to regulate.
The relevant person in charge of PeckShield said: "Such behaviors that use the anonymity and borderless nature of cryptocurrencies to bypass foreign exchange controls will have a negative impact on the country's economy and society, and bring challenges to supervision. In this regard, PeckShield The CoinHolmes security solution has been exported to provide technical support for the regulatory authorities to effectively combat such incidents, and to make the tracking and traceability of cryptocurrency transfers transparent and visualized."
Since digital assets are based on point-to-point payment of the blockchain system, rather than through central bank settlement, this increases the probability of avoiding foreign exchange controls and increases the difficulty of tracking by regulatory authorities.
Although USDC is only a stable currency, it is affecting the political system of the world, including Venezuela and Iran; this time, USDC took the lead in entering the Venezuelan market and is playing a similar role in the economic field. This may be the driving force of the United States-how will the reverse osmosis of encrypted assets break through the hegemony of the world through the digital dollar?
