Stablecoins are not a niche crypto product in some parts of the world. ARYZE interviewed Venezuelan entrepreneur and CEO of El Dorado, a Latin American market place platform for crypto and fiat currencies offering a free multi-currency digital wallet to its users. Guillermo has a background in banking and finance.
He discovered bitcoin in 2013 and has built the first bitcoin mining premises for institutional investors, becoming one of the most prominent bitcoin mining ventures in the capital city of Caracas. Today he is one of Latin America´s leading experts in digital currencies, especially stablecoins.
Latin America is a huge market for stablecoins
Hyperinflation and political instability coupled with a young population, similar to Africa are drawing more and more people to adopting crypto as a way to save their assets and protect their wealth. Venezuela is one of the countries leading in crypto adoption in Latin America.
How are everyday people/businesses using stablecoins in Venezuela?
Primarily as a hedge against hyperinflation and savings mechanism. Only about 8% Venezuelans have access to a foreign bank account and for most people having a crypto account is a more convenient alternative to having US dollars. The population using stablecoins are mostly young people and small/medium merchants in the informal sector, which makes a big part of the Venezuelan economy.
Another significant part of the population using stablecoins and crypto in general are freelancers, web developers, designers etc.They use P2P on Binance and change their bolivars for stablecoins, mainly USDT.
How do people overcome the technological barriers?
Stablecoins are a life saver for many Venezuelans today. Even the poorest people become educated in ways to protect their savings and learn because here having a financial alternative to one of the world´s highest devaluated national currencies (bolivar), is simply a matter of life or death.
Why are stablecoins so popular among venezuelans?
Most Venezuelans undestand why USD is important for them in order to survive and have small savings. The main reason why stablecoins are so popular are the stability they provide compared with other digital assets that are highly volatile such as Bitcoin, even though crypto in general is deemed less volatile than the local currency. But in Venezuela, stablecoins are definetely the gateway drug for the digital economy.
What are your thoughts on Petro as the first state-issued “crypto project” ?
More than 80% of GDP has been lost in Venezuela, the Petro was created by the Venezuelan government to circumvent international sanctions. Basically it has been yet another instrument for currency control, as we have repeatedly seen in the last 20 years.
Petro is a complete failure today and has not been accepted on any international exchange.
Is it difficult to have a crypto business in Venezuela?
In spite of official hostility, there is so much necessity for alternative finance in Venezuela that this is where we see the biggest opportunity for stablecoins right now worldwide. However, we really have an international approach and that is the reason I have decided to be legally established both in the US and in Europe. Naturally, we are also working on operating throughout the Latin American region.
Circle worked with the US Government & the Venezuelan opposition government to release frozen Venezuelan assets in the USA to help doctors. Any thoughts?
It always pleases me to know doctors receive the ressources they need to do their job. However, apart from that specific aid to the medical workers in Venezuela, Circle has not done much else for the Venezuelan population at large and in my opinion, it was mostly a political and marketing campaign for them.
Should El Salvador have adopted a trusted stablecoin as legal tender instead of Bitcoin ?
El Salvador was already dollarized from the year 2002 so their move to rely on Bitcoin as a legal tender is very smart, in my opinion. It has attracted a lot of attention from the international media and crypto space resulting in many companies moving to El Salvador. In terms of marketing and creating more business for them it was an interesting move and we will have to see its real Bitcoin adoption, and whether it actually rises there.
The majority of people deal in cash in El Salvador so we need to see whether Bitcoin can scale for the Salvadorans.