10 ms·

Venezuela is a testing ground for digital dollarization, Zelle doesn’t like it

105 points by jpkoning 6y ago

deleted 6y ago
[deleted]
monadic2 6y ago
Which Venezuelans does this refer to? Kind of weird that this is completely missing any kind of quotation, interview, or source.
- olivermarks 6y ago
  From the article 'Access to U.S. bank accounts is fairly common in Venezuela. Many Venezuelans students have Zelle-linked U.S. bank accounts, which they continue to use when they return home. A large expatriate community in the U.S. provides family and friends back in Venezuela with Zelle access. Ecoanalítica, a macroeconomic analysis company, recently tracked over 15,000 transactions in 10 different Venezuelan cities including Caracas, San Cristóbal and Puerto Ordaz. Around 56% of these transactions were conducted in U.S. dollars. According to Asdrúbal Oliveros, an economist at Ecoanalitica, 12% of all transactions were processed by Zelle. Those are impressive statistics. The fact that Zelle payments are free has no doubt promoted usage' To answer your question: a large percentage of the Venezuelan population.
  - deleted 6y ago
    [deleted]
  - coderintherye 6y ago
    15,000 transactions is not "a large percentage of the Venezuelan population". Furthermore, the percentage of the population that went to the U.S. is also not large. The population of Venezuela is 28.8 million [0] The number of ex-pat students abroad is relatively tiny: 8,540 to the U.S. for 2016/2017 school year. [1] [0] https://data.worldbank.org/country/venezuela-rb https://data.worldbank.org/country/venezuela-rb [1]https://wenr.wes.org/2018/11/venezuela-in-crisis-what-does-it-mean-for-northbound-student-mobility https://wenr.wes.org/2018/11/venezuela-in-crisis-what-does-i...
    - olivermarks 6y ago
      impressive research, thanks I was assuming Ecoanalítica analysis of 15k transactions was not the entirety but a sample
    - firekvz 6y ago
      Getting data from google is not gonna help you as there is barely official info, since the gov hides those numbers, we dont have propper census data or emigration data Venezuela population is calculated to be 24 millions at the moment, with more than 5millions who left the country over the past 5 years, those 5millions are OFFICIAL numbers, they don't even account for illegal venezuelans who crossed the borders to colombia or brasil, that are calculated on 2 or even 3 more millions, we can't know. I can count with my hand the VES transactions I've done this month, but transactions in USD, are over 100, I just checked my bofa app and i have to wait "load 25 more" 2 times to cover this month.. Also you forgot to account for the 500k legal +400k ilegal venezuelans in the US. I have no clue why this article is talking about expat students
      - coderintherye 6y ago
        The article is specifically about expat students and notes 15,000 transactions. If you want to talk about other stuff that is not in the article, that's great to share, although everything you shared is anecdotal. I suggest if you want hard numbers on crypto in Venezuela you should check out GiveCrypto which has crypto programs running in country with verifiable data.
      - deleted 6y ago
        [deleted]
  - monadic2 6y ago
    Yes I saw that and thought I was missing something because the article is very consistent in using “Venezuelans” rather than “a small minority of Venezuelans in major metro areas”. Granted I should have acknowledged this in my original comment.
- earthtolazlo 6y ago
  There is a popular theory in cryptocurrency circles that many Venezuelans are turning to Bitcoin as a way to escape inflation of the Bolivar. Evidence supporting this theory seems to be scant, however.
  - coderintherye 6y ago
    If you are interested in this, GiveCrypto has been experimenting with direct crypto transfers in Venezuela: https://medium.com/givecrypto https://medium.com/givecrypto Results are mixed, but there is some movement.
  - sushid 6y ago
    Yeah escaping inflation with a volatile cryptocurrency seems unintuitive for me. You're probably better off with a stablecoin if anything.
    - gus_massa 6y ago
      [Hi from Argentina!] A volatile cryptocurrency can go up or down. A currency with a 2000% annual inflation can only go down. Here in 1990 we get Pesos that was something like a stablecoin. The Economy Minister said "One Peso, [equal to] one Dollar". Ten year later the President said "The person who deposited dollars [in the bank] will receive dollars". Then ... https://en.wikipedia.org/wiki/1998%E2%80%932002_Argentine_great_depression#End_of_fixed_exchange_rate https://en.wikipedia.org/wiki/1998%E2%80%932002_Argentine_gr...
      - sushid 6y ago
        I get that but again, it's not like these folks want to speculate with their life savings, right? If that's the case, it seems like a stablecoin would be the right choice rather than BTC.
        gus_massa 6y ago
        My guess is that they are using that for the working money of the business, that they keep only for a week or a month. (A 2000% annual inflation is almost 5% daily, so if you have to keep the money for two days it is better to convert to something else even if the conversion has a 10% spread.) For long term storage, my guess is that they get some real dollars and keep them under the mattress or buy some real state. [We never had here in Argentina this level of inflation for a so long time, so I have to guess. It is weird, because most of the time I can just say "Been there, done that.", but this is an exception.]
whoisjuan 6y ago
Sounds like a good case for Tether or another US-dollar tied stable coin.
- rglullis 6y ago
  Please stay away from Tether and do not encourage other people to adopt it. https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/ https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/
  - whoisjuan 6y ago
    Yeah. You're right. I was advocating for the concept. Not the coin per se.
tantalor 6y ago
Why not just use credit cards?
- xeromal 6y ago
  Extra fees?
- jpkoning 6y ago
  The point-of-sale terminals in Venezuela are not set up to accept U.S. dollars via cards. (They do have cards there, it's just that a card payment is by necessity a Venezuelan bolivar payment.)
  - firekvz 6y ago
    fake, USD cards work perfectly in venezuela, venezuela uses normal mastercard and visa networks, using an USD card in venezuela is exactly the same as using it in brazil or itali or anywhere else. I use my AMEX, BoFA VISA, citi MC, with absolutely no problems on venezuelan point of sales.
    - CyberDildonics 6y ago
      How do you get get USD and how do you pay off the cards? I thought there were international banking controls that stopped outside transactions.
    - rglullis 6y ago
      Do the merchants receive USD or are they forced to convert to worthless Bolivars, at the rate determined by the Venezuelan central bank?
      - firekvz 6y ago
        Merchants receive VES, processing fee are exactly the same as processing a VES card. Bolivars are not worthless when you getting the full exchange value of it, they render worhtless when you put them in a savings account for 1 full year, at this moment, the rate of usd/ves has kept around 1:200k for around 2 months, this kinda gets some time for people to maneuver their VES, it changes hands really quick Central bank rate is pretty much similar as "black market one" since 1 year ago. Sometimes is even better. As of today, 1 USD from an USD credit card in venezuela exchanges to 203.639,64 [1] while 1 usd exchanged in the "black market" gives you 205.310.06 [2] [1] http://www.bcv.org.ve/ http://www.bcv.org.ve/ [2] https://dolartoday.com/ https://dolartoday.com/
wmf 6y ago
Curiously this article doesn't mention Reserve, a stablecoin that is specifically targeting Venezuela. https://reserve.org/ https://reserve.org/
- why_only_15 6y ago
  Their team seems to have shrunk significantly since I last looked, at which point it had shrunk significantly since i interviewed there. I'm not sure they are doing too well.
  - peter_l_downs 6y ago
    For anyone interested in the stable coin space, check out Celo (celo.org). I have to admit I'm involved but that's only because I think it might actually work.
kebman 6y ago
Sounds similar to how Romanians will often denominate rent payment and larger settlements in Euros rather than in Leis (RON). In essence, they're doing it for the same reason; because of the volatility of their own currency. The exception seems to be that this is legal in Romania. I'm not sure the same is true for Venezuela, but please correct me if I'm wrong.
- rjsw 6y ago
  There is an expectation that the Euro will become the official currency of Romania at some point.
  - cstejerean 6y ago
    This happened even before the Euro though, I remember when prices for apartments or cars used to be listed in DEM for example.
- wesammikhail 6y ago
  but but... I thought we banished volatility?
- mmsimanga 6y ago
  Same thing is happening in Zimbabwe, different currency. Prices pegged at USD prices. The local currency Zimbabwean Dollar (ZD) is in serious trouble. Inflation sits at 800%[0] on local currency. [0] https://businesstech.co.za/news/trending/408053/zimbabwes-inflation-rate-hits-785-55/ https://businesstech.co.za/news/trending/408053/zimbabwes-in...
- rafaelm 6y ago
  With a monthly inflation rate of about 80% [1], yes that's the reason. The local currency is worthless. [1]https://en.wikipedia.org/wiki/Hyperinflation_in_Venezuela#National_Assembly_estimates https://en.wikipedia.org/wiki/Hyperinflation_in_Venezuela#Na...
modeless 6y ago
Seems very short sighted of the US government to allow this to just get shut down instead of encouraging it and legitimizing it as much as possible. Seems to me that Venezuelan citizens adopting the dollar would be in the interests of the US government.
- jessaustin 6y ago
  The many inconveniences imposed on Venezuelans aren't done for the "interests" of USA or its citizens. Mostly we're just trying to provoke more conflict so we can funnel more money to armaments manufacturers.
  - deleted 6y ago
    [deleted]
firekvz 6y ago
This article is all written on the decision from Wells Fargo to stop offering zelle to accounts with a Venezuelan mailing adress. The decision from wells fargo seems reasonable, most of the Venezuelans (including me) were using zelle for commercial exchanges or forex exchange, and that is clearly agains the TOS for general uses. I personally know business owners getting more than 20k daily in their personal zelle accounts, it was obvious that a shutdown was coming to it. As you might understand, there is almost 500k legal venezuelans in the US [1] and another 400k [2] illegals, that’s almost 1million Venezuelans in the US, our country population right now is about 23millions (more than 5 millions have flee the country), so, pretty much everyone have family or friends in the US with zelle accounts and that is why zelle is so widely use it in here, but it starts a problem for US banks when people with business that are not related at all to US start using zelle (us based) to collect payments (of venezuelan business), this payments are all done in personal accounts and never declare taxes or anything, so… that’s a huge problem for banks For all of you wondering if people in Venezuela uses bitcoin, NO WE DON’T USE BITCOIN AT ALL, there are only 2 uses for bitcoin in Venezuela, 1st use is as a currency exchange medium (USD to VES), hugely backed by drugs money + laundering… 2nd is to write nice articles about how bitcoin is changing venezuela for international media to consume [1] https://en.wikipedia.org/wiki/Venezuelan_Americans https://en.wikipedia.org/wiki/Venezuelan_Americans [2] https://www.migrationpolicy.org/article/venezuelan-immigrants-united-states https://www.migrationpolicy.org/article/venezuelan-immigrant...
- joshuamorton 6y ago
  Your second source makes no mention of illegal or undocumented immigration. It seems to be saying essentially the same as source 1, that there are around half a million Venezuelan americans.
- tonywastaken 6y ago
  > This article is all written on the decision from Wells Fargo to stop offering zelle to accounts with a Venezuelan mailing adress. Is this really going to make a difference then? Most Venezuelans I know with Wells Fargo accounts are using US mailing addresses even if they don't live in the US. They use a friend's address or use a mailbox service. PS. Que paso mi pana
vmception 6y ago
wow a coindesk article gaining traction on hackernews! that's a nice trojan horse towards favorable digital asset sentiment, which usually isn't present here
Ericson2314 6y ago
Huh, so the same politicians concerned with propping up the bank Cartel also would love to see more dollarization. Guess that will put them in a catch-22.
bufferoverflow 6y ago
Why not just use any stablecoin? USDH, USDC, Poxos Standard, Binance USD, TrueUSD, Dai, HUSD, even Tether.
- swader999 6y ago
  That may be the next step after this.
- splintercell 6y ago
  That WILL come. Not just stablecoins directly but stablecoins on an L2 scaling solution. The coming days of currency failures for the world economies (and a lot more of that will happen) will be the ultimate wealth transfer from the rest of the world to America and it would happen because the Dollar will ride to accessibility to the rest of the world on the blockchain.
- ViViDboarder 6y ago
  This is discussed in the article.

105 points by jpkoning 6y ago

deleted 6y ago

[deleted]

Which Venezuelans does this refer to? Kind of weird that this is completely missing any kind of quotation, interview, or source.

olivermarks 6y ago
From the article 'Access to U.S. bank accounts is fairly common in Venezuela. Many Venezuelans students have Zelle-linked U.S. bank accounts, which they continue to use when they return home. A large expatriate community in the U.S. provides family and friends back in Venezuela with Zelle access. Ecoanalítica, a macroeconomic analysis company, recently tracked over 15,000 transactions in 10 different Venezuelan cities including Caracas, San Cristóbal and Puerto Ordaz. Around 56% of these transactions were conducted in U.S. dollars. According to Asdrúbal Oliveros, an economist at Ecoanalitica, 12% of all transactions were processed by Zelle. Those are impressive statistics. The fact that Zelle payments are free has no doubt promoted usage' To answer your question: a large percentage of the Venezuelan population.
- deleted 6y ago
  [deleted]
- coderintherye 6y ago
  15,000 transactions is not "a large percentage of the Venezuelan population". Furthermore, the percentage of the population that went to the U.S. is also not large. The population of Venezuela is 28.8 million [0] The number of ex-pat students abroad is relatively tiny: 8,540 to the U.S. for 2016/2017 school year. [1] [0] https://data.worldbank.org/country/venezuela-rb https://data.worldbank.org/country/venezuela-rb [1]https://wenr.wes.org/2018/11/venezuela-in-crisis-what-does-it-mean-for-northbound-student-mobility https://wenr.wes.org/2018/11/venezuela-in-crisis-what-does-i...
  - olivermarks 6y ago
    impressive research, thanks I was assuming Ecoanalítica analysis of 15k transactions was not the entirety but a sample
  - firekvz 6y ago
    Getting data from google is not gonna help you as there is barely official info, since the gov hides those numbers, we dont have propper census data or emigration data Venezuela population is calculated to be 24 millions at the moment, with more than 5millions who left the country over the past 5 years, those 5millions are OFFICIAL numbers, they don't even account for illegal venezuelans who crossed the borders to colombia or brasil, that are calculated on 2 or even 3 more millions, we can't know. I can count with my hand the VES transactions I've done this month, but transactions in USD, are over 100, I just checked my bofa app and i have to wait "load 25 more" 2 times to cover this month.. Also you forgot to account for the 500k legal +400k ilegal venezuelans in the US. I have no clue why this article is talking about expat students
    - coderintherye 6y ago
      The article is specifically about expat students and notes 15,000 transactions. If you want to talk about other stuff that is not in the article, that's great to share, although everything you shared is anecdotal. I suggest if you want hard numbers on crypto in Venezuela you should check out GiveCrypto which has crypto programs running in country with verifiable data.
    - deleted 6y ago
      [deleted]
- monadic2 6y ago
  Yes I saw that and thought I was missing something because the article is very consistent in using “Venezuelans” rather than “a small minority of Venezuelans in major metro areas”. Granted I should have acknowledged this in my original comment.
earthtolazlo 6y ago
There is a popular theory in cryptocurrency circles that many Venezuelans are turning to Bitcoin as a way to escape inflation of the Bolivar. Evidence supporting this theory seems to be scant, however.
- coderintherye 6y ago
  If you are interested in this, GiveCrypto has been experimenting with direct crypto transfers in Venezuela: https://medium.com/givecrypto https://medium.com/givecrypto Results are mixed, but there is some movement.
- sushid 6y ago
  Yeah escaping inflation with a volatile cryptocurrency seems unintuitive for me. You're probably better off with a stablecoin if anything.
  - gus_massa 6y ago
    [Hi from Argentina!] A volatile cryptocurrency can go up or down. A currency with a 2000% annual inflation can only go down. Here in 1990 we get Pesos that was something like a stablecoin. The Economy Minister said "One Peso, [equal to] one Dollar". Ten year later the President said "The person who deposited dollars [in the bank] will receive dollars". Then ... https://en.wikipedia.org/wiki/1998%E2%80%932002_Argentine_great_depression#End_of_fixed_exchange_rate https://en.wikipedia.org/wiki/1998%E2%80%932002_Argentine_gr...
    - sushid 6y ago
      I get that but again, it's not like these folks want to speculate with their life savings, right? If that's the case, it seems like a stablecoin would be the right choice rather than BTC.
      - gus_massa 6y ago
        My guess is that they are using that for the working money of the business, that they keep only for a week or a month. (A 2000% annual inflation is almost 5% daily, so if you have to keep the money for two days it is better to convert to something else even if the conversion has a 10% spread.) For long term storage, my guess is that they get some real dollars and keep them under the mattress or buy some real state. [We never had here in Argentina this level of inflation for a so long time, so I have to guess. It is weird, because most of the time I can just say "Been there, done that.", but this is an exception.]

whoisjuan 6y ago

Sounds like a good case for Tether or another US-dollar tied stable coin.

rglullis 6y ago
Please stay away from Tether and do not encourage other people to adopt it. https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/ https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/
- whoisjuan 6y ago
  Yeah. You're right. I was advocating for the concept. Not the coin per se.

tantalor 6y ago

Why not just use credit cards?

xeromal 6y ago
Extra fees?
jpkoning 6y ago
The point-of-sale terminals in Venezuela are not set up to accept U.S. dollars via cards. (They do have cards there, it's just that a card payment is by necessity a Venezuelan bolivar payment.)
- firekvz 6y ago
  fake, USD cards work perfectly in venezuela, venezuela uses normal mastercard and visa networks, using an USD card in venezuela is exactly the same as using it in brazil or itali or anywhere else. I use my AMEX, BoFA VISA, citi MC, with absolutely no problems on venezuelan point of sales.
  - CyberDildonics 6y ago
    How do you get get USD and how do you pay off the cards? I thought there were international banking controls that stopped outside transactions.
  - rglullis 6y ago
    Do the merchants receive USD or are they forced to convert to worthless Bolivars, at the rate determined by the Venezuelan central bank?
    - firekvz 6y ago
      Merchants receive VES, processing fee are exactly the same as processing a VES card. Bolivars are not worthless when you getting the full exchange value of it, they render worhtless when you put them in a savings account for 1 full year, at this moment, the rate of usd/ves has kept around 1:200k for around 2 months, this kinda gets some time for people to maneuver their VES, it changes hands really quick Central bank rate is pretty much similar as "black market one" since 1 year ago. Sometimes is even better. As of today, 1 USD from an USD credit card in venezuela exchanges to 203.639,64 [1] while 1 usd exchanged in the "black market" gives you 205.310.06 [2] [1] http://www.bcv.org.ve/ http://www.bcv.org.ve/ [2] https://dolartoday.com/ https://dolartoday.com/

wmf 6y ago

Curiously this article doesn't mention Reserve, a stablecoin that is specifically targeting Venezuela. https://reserve.org/ https://reserve.org/

why_only_15 6y ago
Their team seems to have shrunk significantly since I last looked, at which point it had shrunk significantly since i interviewed there. I'm not sure they are doing too well.
- peter_l_downs 6y ago
  For anyone interested in the stable coin space, check out Celo (celo.org). I have to admit I'm involved but that's only because I think it might actually work.

kebman 6y ago

Sounds similar to how Romanians will often denominate rent payment and larger settlements in Euros rather than in Leis (RON). In essence, they're doing it for the same reason; because of the volatility of their own currency. The exception seems to be that this is legal in Romania. I'm not sure the same is true for Venezuela, but please correct me if I'm wrong.

rjsw 6y ago
There is an expectation that the Euro will become the official currency of Romania at some point.
- cstejerean 6y ago
  This happened even before the Euro though, I remember when prices for apartments or cars used to be listed in DEM for example.
wesammikhail 6y ago
but but... I thought we banished volatility?
mmsimanga 6y ago
Same thing is happening in Zimbabwe, different currency. Prices pegged at USD prices. The local currency Zimbabwean Dollar (ZD) is in serious trouble. Inflation sits at 800%[0] on local currency. [0] https://businesstech.co.za/news/trending/408053/zimbabwes-inflation-rate-hits-785-55/ https://businesstech.co.za/news/trending/408053/zimbabwes-in...
rafaelm 6y ago
With a monthly inflation rate of about 80% [1], yes that's the reason. The local currency is worthless. [1]https://en.wikipedia.org/wiki/Hyperinflation_in_Venezuela#National_Assembly_estimates https://en.wikipedia.org/wiki/Hyperinflation_in_Venezuela#Na...

modeless 6y ago

Seems very short sighted of the US government to allow this to just get shut down instead of encouraging it and legitimizing it as much as possible. Seems to me that Venezuelan citizens adopting the dollar would be in the interests of the US government.

jessaustin 6y ago
The many inconveniences imposed on Venezuelans aren't done for the "interests" of USA or its citizens. Mostly we're just trying to provoke more conflict so we can funnel more money to armaments manufacturers.
- deleted 6y ago
  [deleted]

firekvz 6y ago

This article is all written on the decision from Wells Fargo to stop offering zelle to accounts with a Venezuelan mailing adress. The decision from wells fargo seems reasonable, most of the Venezuelans (including me) were using zelle for commercial exchanges or forex exchange, and that is clearly agains the TOS for general uses. I personally know business owners getting more than 20k daily in their personal zelle accounts, it was obvious that a shutdown was coming to it. As you might understand, there is almost 500k legal venezuelans in the US [1] and another 400k [2] illegals, that’s almost 1million Venezuelans in the US, our country population right now is about 23millions (more than 5 millions have flee the country), so, pretty much everyone have family or friends in the US with zelle accounts and that is why zelle is so widely use it in here, but it starts a problem for US banks when people with business that are not related at all to US start using zelle (us based) to collect payments (of venezuelan business), this payments are all done in personal accounts and never declare taxes or anything, so… that’s a huge problem for banks For all of you wondering if people in Venezuela uses bitcoin, NO WE DON’T USE BITCOIN AT ALL, there are only 2 uses for bitcoin in Venezuela, 1st use is as a currency exchange medium (USD to VES), hugely backed by drugs money + laundering… 2nd is to write nice articles about how bitcoin is changing venezuela for international media to consume [1] https://en.wikipedia.org/wiki/Venezuelan_Americans https://en.wikipedia.org/wiki/Venezuelan_Americans [2] https://www.migrationpolicy.org/article/venezuelan-immigrants-united-states https://www.migrationpolicy.org/article/venezuelan-immigrant...

joshuamorton 6y ago
Your second source makes no mention of illegal or undocumented immigration. It seems to be saying essentially the same as source 1, that there are around half a million Venezuelan americans.
tonywastaken 6y ago
> This article is all written on the decision from Wells Fargo to stop offering zelle to accounts with a Venezuelan mailing adress. Is this really going to make a difference then? Most Venezuelans I know with Wells Fargo accounts are using US mailing addresses even if they don't live in the US. They use a friend's address or use a mailbox service. PS. Que paso mi pana

vmception 6y ago

wow a coindesk article gaining traction on hackernews! that's a nice trojan horse towards favorable digital asset sentiment, which usually isn't present here

Ericson2314 6y ago

Huh, so the same politicians concerned with propping up the bank Cartel also would love to see more dollarization. Guess that will put them in a catch-22.

bufferoverflow 6y ago

Why not just use any stablecoin? USDH, USDC, Poxos Standard, Binance USD, TrueUSD, Dai, HUSD, even Tether.

swader999 6y ago
That may be the next step after this.
splintercell 6y ago
That WILL come. Not just stablecoins directly but stablecoins on an L2 scaling solution. The coming days of currency failures for the world economies (and a lot more of that will happen) will be the ultimate wealth transfer from the rest of the world to America and it would happen because the Dollar will ride to accessibility to the rest of the world on the blockchain.
ViViDboarder 6y ago
This is discussed in the article.