Yahoo Finance Crypto to Venezuela's rescue? A non-profit uses digital coin to ease crisis
A charity founded by Coinbase’s CEO Brian Armstrong is donating cryptocurrency to citizens in Venezuela, with the country roiled by famine, disease and political turmoil.
As Venezuela’s political and economic crisis reaches a boiling point, GiveCrypto.org has figured a workaround to a widespread shortage of money. The organization is donating cryptocurrency to Venezuelans in need, to buy groceries and household goods.
“We early on selected Venezuela as where we are going to work, primarily because money is so broken there,” said Joe Waltman, executive director of GiveCrypto.org told YFi PM in an interview.
The lack of food and money has worsened a crisis that’s driven nearly 4 million of its citizens from the oil-rich Andean nation, according to the UN High Commissioner for Refugees. Those who can’t leave the country are at extreme risk of starvation, as surging prices erode the value of Venezuela’s currency.
Crypto to the rescue?
Venezuela’s collapsing economy has been hit by skyrocketing hyperinflation, power cuts and shortages of food and medicine. It’s prompted some to look to the crypto market for solutions.
Over the last year, the Venezuelan government has created its own digital currency, called the petro, to help ease the crisis. And at least one other charity, called Airdrop Venezuela, is collecting cryptocurrency donations to distribute to 100,000 Venezuelans.
Meanwhile, GiveCrypto.org works by recruiting on the ground “ambassadors” who will identify persons in need.
Each participant will receive $10 paid in Ethereum (ETH) per week for six weeks. The organization will employ a field contractor to help recruit local vendors that accepts cryptocurrency payments and sell primary items like food and household supplies.
“We have people on the ground who are trusted, who understands the situation in their communities,” Waltman told Yahoo Finance.
“We rely on them to select people that are in need, and we directly transfer cryptocurrency to the people who are ambassador-select,” he added.
The cryptocurrency payment and transaction is managed through Coinbase’s “Wallet Lite” app that is enhanced with Spanish-language options, and compatible with Android 4.1 and above.
GiveCrypto.org said recently that this will help reach 96% of Android users in Venezuela.
Volatile price swings in the crypto market might make GiveCrypto’s solution seem curious. However, with an annual inflation rate at over 1,000,000%, digital currencies like Bitcoin (BTC) are relatively more stable than the Venezuelan bolivar.
“On the vendor side, it’s not that hard of a pitch,” Waltman explained to Yahoo Finance.
“If you go to a local corner store and say, ‘Hey, we’re going to be distributing cryptocurrency...to x people within 500 meter radius from your store, do you want to be the only place they can spend this?’” he asked. “Most small business owners will jump at that chance.”
Some of the biggest donors so far are well known figures in the cryptocurrency world—including Ripple’s CEO Brad Garlinghouse— and former “Mighty Ducks” actor Brock Pierce, who is director of the Bitcoin Foundation.
“We expect the crypto community is probably the place to where we will be getting a good chunk of the donations,” Waltman said. “Our mission is in line with some of the early crypto people.”
Grete Suarez is producer at Yahoo Finance for YFi PM and The Ticker. Follow her on Twitter: @GreteSuarez
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