US Taps Circle’s USDC for ‘Foreign Policy’ Goals in Venezuela

Payments startup Circle is getting political.

The stablecoin issuer is working with the U.S. government to bypass Nicolás Maduro and support the Bolivarian Republic of Venezuela led by Juan Guaidó.

Circle is using USDC, the dollar-pegged stablecoin it issues with Coinbase, to distribute relief funds to medical workers and other Venezuelan locals, it announced Friday.

CEO Jeremy Allaire told CoinDesk this was his company’s first government partnership.

“The partnership, obviously, is with the exiled government,” Allaire said in an interview. “The history here is many countries, including the United States, recognize President-elect Juan Guaidó as the president of Venezuela. Maduro did not accept the results of an election and maintained power.”

Maduro was declared an “usurper” by Venezuela’s national assembly, which named Guaidó the interim president in January 2019, according to BBC News.

“As that happened and sanctions were imposed, funds that belonged to the government were seized,” Allaire said.

The U.S. Treasury Department has been trying to send these funds directly to Venezuelan residents, but this task has been made difficult after Maduro tried blocking the distribution of these funds. Peer-to-peer payments startup Airtm has been working to solve this issue, with limited results so far.

Allaire declined to identify which part of the U.S. government is working with Circle and Airtm, but said Circle had been licensed to distribute funds using USDC.

According to the company’s blog post, the Treasury Department and the Federal Reserve deposit funds seized by the U.S. into a bank account in the U.S. tied to the Guaidó government, which converts the funds into USDC that Circle then sends to Airtm.

Airtm has a business account with Circle under the terms of the arrangement. Funds flow through Circle to Airtm, which can then distribute USDC to any of its mobile digital wallet users. Airtm currently has “half a million users in Venezuela,”…

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