A few days ago Colombian based cross border remittance startup Valiu launched a Bitcoin backed synthetic US Dollars, so Venezuelans to access stable assets and bypass the hyperinflation that is plaguing their national economy. The project is still in its alpha state and Valiu has partnered with food delivery app Rappi because it offers a large use base to help with adoption when its rolled out. Could this be a solution for what is happening in Lebanon as well?
On April 23, Valiu chief executive Simon Chamorro tweeted that the firm’s ‘cryptodollar’ has launched in alpha. He stated, “After 4 months of 80+ hour work weeks, 500k+ lines of clean code written across 4 engineers, shifting the company fully remote due to COVID, and completing a rigorous regulatory analysis … I’m proud to say that Valiu’s cryptodollar is now live and running in Alpha.”
Valiu’s synthetic dollars are stored in a smartphone wallet app, and can be sent among Venezuelan users without fees. The synthetic dollars are backed by Bitcoin, however, users without cryptocurrency knowledge can simply buy and transfer cryptodollars by depositing cash at one of Valiu’s thousands of remittance partners in Colombia.
Sid Ramesh, an advisor to early-stage startups, posted a video detailing the app’s operation, with Chomarro sending him one cryptodollar from his smartphone in less than 30 seconds.
Valiu CEO has described a recent influx of migrant workers from Venezuela coming into Colombia as the inspiration for the cryptodollar project, as many had been using a risky black market for remittances that developed as a result of Western Union and MoneyGram becoming increasingly subject to capital controls.
Valiu has been providing fiat currency-based remittances to Venezuelans for seven months but hyperinflation meant recipients ended up with less bolivars during the time it took to arrive.
“99% of remittances still arrive in bolivars,” Valiu’s head of research Alejandro Machado tweeted earlier this month. “Dollars cash hardly make it across borders, especially in the middle of #COVIDー19 lockdowns.”