A few months ago, Zooko Wilcox received his first request for help from someone in Venezuela.

The founder and CEO of Zerocoin Electronic Coin (ZECC) has been paying close attention to the "primary humanitarian crisis" that Venezuela showed in his first message, followed by a series of other messages.

Wilcox tells CoinDesk

: "They said 'you see what happened?'We now need zcash',''

Given that Venezuela’s monetary policy has made its currency, Bolivar, over-substantially worthless, citizens are looking for ways to store traditionally stable but difficult to obtain the value of the dollar.

The trick is to convert Bolivar into dollars while protecting its identity.

Although the government did not prohibit the U.S. dollar, the official exchange rate hampered legal ownership and led many Venezuelans to buy dollars on the black market and store them under the proverbial mattress.

The privacy-centric cryptocurrency zcash created by Wilcox is such a picture.

Wilcox worked with Mexico’s point-to-point switch AirTM last month to use zcash as an optional intermediate step in translating Bolivar into dollars, in response to this large number of requests.

Although the slow adoption of zcash in AirTM's 168,000 Venezuela users to date has only been the beginning of this partnership. Ruben Galindo Steckel, founder and CEO of AirTM, said:

"We just helped zcash contact those who needed it most, not necessarily those who liked privacy, but Venezuela were oppressed."

Seek stability,

AirTM was founded in 2015 specifically designed to allow users of highly-expanded economies like Venezuela to store value in the value of the history of the US dollar

The company offers users a variety of ways to enter and exit the US dollar. For example, they can send money from a bank or PayPal account, drop cash at Moneygram, or add zcash (or one of the other nine cryptocurrencies) to AirTM. The company then deposits the currency on behalf of the customer in U.S. dollars.

If AirTM can find the buyer of the original currency, the client can withdraw the funds. As an exchange service, companies usually reduce the cashier commission by 20%. When participating in merchant shopping, users can also switch back to local currency at the payment point.

Of the $5 million transactions globally conducted last month, AirTM did not have any underground operations and was registered as a money services business by the US Department of the Treasury's Financial Crime Enforcement Network (FinCEN). Therefore, the startup company will conduct KYC audit according to the AML regulations.

At the beginning of the partnership with ZECC earlier this month, AirTM has registered more than 168,000 Venezuelaans in the country and up to 40,000 people living abroad and returning money

According to Josh Kliot, head of AirTM's participation and operations, Venezuela users now use AirTM to conduct about 60,000 transactions per month, or about 60% of all operations. The remaining 40% of the business is spread over 120 countries, including Colombia, Panama, Brazil, Mexico, Argentina and Spain.

In a related effort, AirTM also collaborated with four Venezuelan NGOs as part of the newly formed AirTM Foundation, which aims to provide a wide range of humanitarian needs for donations through zcash and other supported payment methods.

To make it easier to connect with colleagues around the world who are willing to purchase bolivars whose zcash is rapidly shrinking, the partnership between ZECC and AirTM includes the marketing investment of the two companies, the promotion through various communication channels and the abandonment of AirTM. Reduced by 20% during the entire cooperation period. (AirTM's $0.30 transaction fee still exists.)

In addition, ZECC is reviewing the AirTM user experience and providing feedback on how to make interactive and non-technical users more user-friendly. Wilcox described the review of the AirTM exchange Bitcoin, Ethereum, and other password interfaces, which is "community contribution on how to make cryptocurrencies more accessible."

To date, only about 500 zcash users have conducted 1,000 transactions on Venezuelan AirTM since its release on May 8. But Kliot said he expects to change based on what partners have learned from the process.

He told CoinDesk:

"The first 30 days allowed us to measure how to maximize our marketing efforts. We expect a substantial increase in the next 2 months."

The era of petroleum

Because the Venezuelan government is seeking ways to solve various sanctions because it introduced its own cryptocurrency, known as oil, it is said that in February it sold up to $5 billion in funds.

But according to Wilcox, Venezuelan citizens do not trust oil companies and they do not trust Bolivar

"Zcash is an open source decentralized system whose network supply and behavior is part of the global public consensus. Oil is part of a building and under the control of the Venezuelan government," Wilcox said.

To be fair, zcash is not an ideal store of value that many people think. Like almost all cryptocurrencies, it fluctuates sharply against the U.S. dollar.

But the privacy features of zcash make it an appealing way to move from rapidly depreciating bolivars to dollars held on AirTM.

Kliot writes in an e-mail: “Venezuela’s holding of dollars is legal. But “they may want to hide their identity cards,” to avoid being detected by unofficial means to purchase the US dollar – that is to say, the free market. The interest rate is exchanged by the government's official (human) interest rate for the dollar. ”

According to a local AirTM zcash user, he talked with CoinDesk through an encrypted messaging platform

according to Venezuelan, stressing that the cost of going to a grocery store may now be higher than the minimum wage.

According to this source, a 40-something self-proclaimed economist was unwilling to give his name, and some citizens have used carton eggs as a store of value.

The source sent a receipt to CoinDesk last month, which included two kilograms of bananas, biscuits, half a kilogram of white cheese, two liters of orange juice and two liters of corn oil consumption 1.921 million bolivar

This is higher than Venezuela's minimum monthly salary, but the black market dollar is only about $10.

Given the high cost of living, the relatively low transaction costs of zcash make it a more attractive cryptocurrency for Venezuelan people than Bitcoin, the economist said.

"People use Bitcoins to save, but not to buy daily," he said. "This is an opportunity to use an easy-to-use wallet and low cost to help encrypt."

Sanctions evasion?

All this work was carried out in the complicated context of the rules, sanctions and attempts of the Venezuelan President Nicholas Maduro to escape them.

Earlier this month, President Donald Trump prohibited anyone from buying or processing "oil."

However, as long as zcash or any support for Venezuela does not interact with oil, any person on the U.S. Department of the Treasury's Foreign Assets Authority sanctions list or debt owed by the Maduro government, AirTM customers or Foundation donors It is safe.

This is according to McLaffer, a research assistant to the Defense Foundation for Democracy in Washington, DC, who specializes in Venezuela’s policies. But Frai warned that it is the company’s responsibility to ensure that these conditions are met.

She said: "But, any U.S. company that provides funds to Venezuela still has the responsibility to ensure that funds do not reach Venezuela officials."

In addition, "anonymous transaction does increase the risk of compliance."

According to SteTMkel, founder of AirTM, this is where the company’s anti-money laundering/KYC policy comes into play.

"We have not touched or established a relationship with any Venezuelan company, bank or government," he said. "We only cooperate with people."

A bigger problem than the US regulations may be the Venezuelan government, which may not be fond of the special application of this cryptocurrency.

Stikler said when asked whether it is possible to lose to Venezuela:

"We are worried, but the last three years have been worrying."

AirTM exchanges images through AirTM

CoinDesk, the blockchain news leader, is a media channel that strives to achieve the highest news standards and adheres to strict editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrency and blockchain startups.

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