Hyperinflation expert Steve Hanke has teamed up with a Mexico City-based blockchain powered currency platform in order to get financial aid to Venezuelans.

Hanke, also a professor of applied economics at Johns Hopkins University, and AirTM, will work together on project “AirdropVenezuela”, which hopes to raise cryptocurrency donations up to USD1 million. Once raised, the funds will then be released to 100,000 Venezuelans via the AirTM platform.

The annualized inflation rate hit a record high of 117,681% this month as Venezuela’s ongoing economic downturn continues to render the country’s currency, the bolivar, almost worthless. President Maduro continues to refuse to peg the bolivar to the US dollar, which has been cited as a possible solution, while the alternative cryptocurrency Petro is rarely available and little used. Also, President Trump signed an executive order in March 2018 which particularly targets Petro for sanctions. Along with Trump, many US lawmakers have also denounced the currency and passed bills to restrict its use.

Hank outlined his plains for an airdrop solution: “We provide in effect a clearinghouse that allows for the exchange of bolivars for dollars and vice versa… This is also much superior to distributing physical cash because you don’t have to run the risk of driving your armored truck into the country.”

Not only are armored cash-delivery vehicles at risk of hijacking, but most stores are empty of provisions due to the worthlessness of the Bolivar. Free trading is highly government controlled and the government shuns private foreign exchange dealing.

Hanke maintains that a sum of USD 1 million would open up the doors to Venezuela, prompting nationals to begin to use the US dollar for everyday transactions, thus helping to re-stabilize the struggling economy.

 

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