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The four advantages of fast speed, no borders, stable currency value, and large market share are the advantages of USDC, which are very attractive to high-inflation countries.
Original title: “Digital USD wants to subvert Venezuela’s encrypted assets, how to break the situation? 》
Written by: PeckShield
Circle, the issuer of the stable currency USDC, recently announced that it has cooperated with the U.S. government for the first time by using USDC, a stable currency pegged to the U.S. dollar, to bypass Venezuela’s current President Nicolas Maduro, support the opposition Juan Guaido and give Venezuelan medical staff and other local residents distributed relief funds.
At the beginning of this year, the new crown pneumonia epidemic spread globally. The Maduro government applied to the International Monetary Fund (IMF) for a US$5 billion anti-epidemic aid loan to implement preventive measures. However, the IMF and the Venezuelan government are not universally affected by the international community. Admit to deny its request.
Back in early 2019, the Maduro government announced that it would cut off diplomatic and political relations with the U.S. government and demanded that the U.S. leave Venezuela within 72 hours. At the same time, the opposition Juan Guaidó announced his inauguration as the “interim president” and no longer recognized Maduro’s presidential status. The 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 backed by the United States. The peak of the two factions confronted each other, splitting the dual power centers into different camps, and the turmoil and unrest caused by the reorganization of power and the competition for spheres of influence permeated. The ruling and opposition factions “ridden a tiger with difficulty” and the political civil unrest in Venezuela kicked off.
This year, the spread of the new crown epidemic and the drop in crude oil prices have made the already fragmented Venezuela even worse.
How can the domestic “petro currency” enter the committee when the foreign stable currency is cold?
At the beginning of 2018, Maduro proposed to abolish the “hegemony” of the U.S. dollar and use petrocoins based on the 5 billion barrels of oil reserves in the Ayacucho block No. 1 oil field in the Orinoco heavy oil belt to boost Venezuela’s economy. Rebirth. Subsequently, the first legal digital goods-“Petro Coin” (Petro Coin) came out.
So far, it has been nearly three years since Venezuela launched the petro coin. But even though the Maduro government has been trying its best to promote the petro coin and forcibly incorporate it into the daily lives of the residents, the petro coin has not opened up in the Venezuelan economic market.
In addition to other factors that are not recognized by other mainstream countries in the world, the credibility of the local government is low, and local residents still prefer a stable international currency, the petro currency itself is technically not perfect for large-scale payments; The currency value is not stable enough.
The funds from the outside cannot come in, and the funds inside cannot go out. The fiat bolivar in the bank faces the risk of pouring at any time. This is the current situation in Venezuela.
The people in Venezuela desperately need a borderless and stable cryptocurrency to cut a hole in the isolated Venezuela; outsourced powers hope to use the natural globalization of cryptocurrency to accelerate the penetration of strong fiat currencies.
In 2019, Venezuela experienced crazy inflation. The inflation rate was as high as 10,000,000%. The local currency depreciated to worthless. People did not hesitate to dig Bitcoin at the cost of being arrested by the police to obtain economic income. However, the value of Bitcoin fluctuated too much. Big, which makes it more like an asset, stock, rather than currency.
The stable currency not only has the core advantages of Bitcoin in technology-speed, no borders, but also has the advantages of currency stability that Bitcoin lacks, which makes it more likely to replace Bitcoin in these high-inflation countries. . Imagine that 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 Meituan founder Wang Xing commented on Facebook’s proposed Libra launch: “The strategy is very clear, and the persimmons are soft. First, gradually replace the currency systems of weak countries in 200 countries around the world, and encounter a very small number of powerful countries. Of course, if you should bow your head, then you will collude.”
As long as the penetrating digital currency is based on the U.S. dollar, the dominance of the U.S. dollar can continue in the field of digital currency.
Can USDC, the Son of the Chosen, secure the hegemony of the US dollar?
Why can USDC become the son of choice?
According to DAppTotal data, as of November 24, the total stablecoin market was 24.24 billion U.S. dollars. USDT ranked first with a market share of more than 78%. USDC followed closely with a total market of nearly 3 billion U.S. dollars. The market share of emerging markets exceeds 50%, ranking first in emerging markets.
Although USDT still holds the largest market share of stablecoins, it is not regulated by the US financial sector. Since May last year, it has been suppressed by the New York State Attorney General’s Office. And USDC’s issuer Circle, all currency issuance activities are subject to the supervision of the US government, which is the most popular way for the US financial sector.
Speed, borderless, stable currency, and large market share are the advantages of USDC, which are very attractive to citizens of high-inflation countries. 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 territory and prevent the entry of the dollar through financial control. However, the digital dollar breaks the barriers of the territory and makes it more convenient to penetrate into any country.
On the one hand, the use of USDC helps relevant US departments 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 foreign exchange policy control of the Latin American government and weaken the economy of sovereign countries. The ability to regulate.
The relevant person in charge of PeckShield said: “Such behaviors that use the anonymity and borderlessness of cryptocurrencies to bypass foreign exchange controls will have a bad impact on the country’s economy and society, and pose challenges to supervision. In this regard , PeckShield The CoinHolmes security solution has been exported to provide technical support to help the regulatory authorities to effectively combat such incidents, and to make the circulation of tracking and traceable cryptocurrency transparent and visual. “
Since digital assets are based on the blockchain system for peer-to-peer payment, rather than through bank central settlement, this increases the probability of avoiding foreign exchange controls and increases the difficulty of tracking by regulatory authorities.
Currently, CoinHolmes supports the tracking of BTC, ETH, USDT, USDC and other currencies. As long as you enter the corresponding address, CoinHolmes can continuously monitor the address, and combine the existing hundreds of millions of address tags for fast and accurate tracking and marking.
Although USDC is only a stable currency, it is affecting the world’s political system, including its impact on Venezuela and Iran. This time, USDC has taken 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-through the hegemonic world of digital dollars, how will the reverse osmosis of encrypted assets break the game?
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