Peer-to-peer electronic cash transfer mechanisms such as cryptocurrencies should be encouraged to help a dire humanitarian situation in Venezuela and undercut President Nicolas Maduro’s failing regime, a Washington geopolitical think tank has urged. In a note published Monday, the Center for Strategic and International Studies, highlighted the use of such peer-to-peer transmissions as means of delivering targeted assistance directly to individuals on the ground in a manner that circumvents the arms of corrupt state actors and their proxies.
“More peer-to-peer electronic cash transfers should be encouraged to assist with humanitarian aid from abroad,” Moises Rendon, Associate Director at CSIS’s Americas Program, wrote, adding:
“For example, the use of cryptocurrency to safely transfer worldwide donations, following a model like EatBCH, is a novel approach already creating a positive impact for Venezuelans on the ground today.”
Launched in May, EatBCH Venezuela is Twitter account with a bitcoin cash address that donors can send funds directly to. “We are Venezuelans trying our best to feed our neighbors in these difficult times,” the account profile reads.
The account administrator regularly posts photos from the ground, ostensibly chronicling how the funds were used and who was assisted.
A similar EatBCH account has sprung up in South Sudan, another conflict-ridden region.
In addition to being more targeted and efficient than traditional humanitarian methods, peer-to-peer electronic transfers in the Venezuelan context can help undercut the Maduro regime’s ability to “manipulate and control the population,” Rendon argued.
One of Maduro’s primary means of keeping the population in subservience has been weaponizing food aid as a political tool to reward supporters and punish dissenters.
Because of rampant inflation and shortages, most Venezuelans are now dependent on a state-administered food aid program known as Local Committees for Supply and Production, or CLAP in Spanish, which delivers basic stables such as rice, flour, oil and sugar. However, recent statistics show that far more Maduro supporters are dependent on the program than opponents and independents. 83 percent of pro-Maduro voters cite CLAP as their main source of food, against just 14 percent of independents.
Because CLAP and other benefits are administered through a government-issued electronic identification card, it has created a vicious cycle of dependency on a failing state.
“This strategy allows the Maduro regime to provide greater assistance to its own supporters, and to target others who are desperate enough to change their vote in order to receive food aid,” Rendon argued, emphasizing:
“It is becoming evident that the Maduro regime is weaponizing its safety net program during a time of crisis in order to prioritize, amplify, and concentrate political power.”
Rendon, who published a paper in early 2018 arguing that blockchain technologies can play a critical role in Venezuela's recovery, called on the United States and other like-minded countries to help "expose and dismantle the politicized and corrupt CLAP program" through the use of individual sanctions directed at those administering the program and developing new means of providing targeted humanitarian assistance that can free Venezuelans from dependence on government food aid.
A critical component of the latter, he argued, is greater use of electronic peer-to-peer transfers via cryptocurrencies and schemes such as EatBCH....