Jill Carlson, a CoinDesk columnist, is co-founder of the Open Money Initiative, a non-profit research organization working to guarantee the right to a free and open financial system. She is also an investor in early-stage startups with Slow Ventures.
We Americans love to complain about the economy, about policymakers, about bailouts, about the Federal Reserve. But whenever I travel abroad, I am struck by the immense privilege of having the U.S. dollar as my native currency. I have yet to find a cabbie, a hotel clerk or indeed a banker in any part of the world who will not gladly accept the greenback as a form of payment. In countries from Argentina to Zambia I have found demand for dollars when I have come up short on the local currency.
The demand for dollars was never more evident to me than in the course of the research on Venezuela I conducted with my colleagues at the Open Money Initiative. We went into the research hoping to learn how tools and technologies like bitcoin were being used by Venezuelans facing the collapse of their own currencies. What we found over and over again was, instead, rampant demand for only one weapon in the face of hyperinflation: the U.S. dollar.
We spoke to young entrepreneurs who leverage convoluted networks of friends and relatives to reach someone with a U.S. bank account through whom they can keep some of their wealth in greenbacks. We spoke with some of these account holders, de facto informal bankers for entire communities, who have to maintain paper records detailing their nephew’s girlfriend has $200 held in their account and their ex-wife has $50 with them. We spoke with moneychangers in Venezuela who work tirelessly to meet demand for U.S. dollars, even smuggling hoards of cash across the border.
This demand for U.S. dollars is not only present in extreme circumstances, as in Venezuela, nor only at the level of the individual. It is most notable at…