In a press release on May 12, Coinbase-backed startup reserve made an announcement about the launching of a crypto-fiat payments app in Venezuela as well as Angola.
As per the announcement, the company will be listing its own utility token known as Reserve Rights (RSR) on Houbi Prime, a huge exchange token sale platform that transacts with Houbi.
Businesses and people will be able to switch back and forth from the Reserve Dollar (RSD) (firm’s stablecoin) to local fiat currency through the project’s stablecoin app. Interestingly, ‘in the coming weeks,’ according to reports, the app will officially be launched in Google Play for Android users to access and use it. RSD, the firm’s stablecoin, is a decentralized, United States dollar-pegged cryptocurrency.
Venezuela is a country ravished by extreme inflation level that is the reason it was chosen as a launching place for the app, said CEO and co-founder of Reserve Nevin Freeman. He noted:
“A lot of people, including some of our investors, discouraged us from starting in Venezuela. [..] The hyperinflation there is the exact problem that Reserve is built to fix, and Venezuela is suffering the most inflation of anywhere in the world right now, so we felt that it had to be done.”
Out of the 16 countries have annual inflation that surpasses 20%, Venezuela seems in a much worse situation as it is said to be losing nearly 10% of its purchasing power every day.
Due to the currency crisis in that country, use bitcoin and other cryptocurrencies have spiraled in the region. For instance, while 1,000 merchants could accept dash (DASH) as payment in August 2018, Venezuela celebrated the 2,500th merchant in December the same year.
Stablecoin reserve has also entered into a partnership with 7Mobile Africa (Angola’s largest mobile importer) that allows the app to be preloaded before the shipment of the smartphones.
Apart from Coinbase, the backing for the project has come from other huge venture capital names like Sam Altman, Peter Thiel, Distributed Global and GSR.IO, Arrington XRP Capital, Digital Currency Group, among others.
In terms of adjusted daily trade volume, Huobi is currently the world’s 9th largest cryptocurrency exchange.
News broke out in February that the Venezuelan government had instituted restrictions and regulations that govern crypto remittances that take place inside the country. All crypto remittances were subjected to the given monthly limits and also commissions that should be paid to the National Superintendency of Crypto Assets and Related Activities.