Bloomberg Businessweek - USA (2020-11-16)

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BloombergBusinessweek November16, 2020

theother hand,isanexampleof

whateconomistscallspontaneousdol-

larization.“Thegovernmentdoesn’t

tell you, manytimes it’s even ille-

gal,”saysSteveHanke,a professorof

appliedeconomicsatJohnsHopkins

Universityandanexpertonhyperin-

flation.“Ithappensbigtimeif youhave

sanctionsoroccupyingarmies.”

TheTrumpadministrationhasmade

nosecretofitsdesiretoenableregime

changeinVenezuela,butit’srefrained

fromdispatchingU.S.troopstotheSouth

Americancountry.Insteadit’stargeted

Maduro, along with approximately

140 currentandformergovernmentoffi-

cialsandentities,withsanctions.

Greenbacksarealsoindemandon

thestreetsofHavanaandTehran,but

inthose placessanctions effectively

captheavailabilityofdollarstowhat

canbebroughtinbytouristsorvisiting

expats.Unlikeinthoseotherpariah

states,digitaldollarizationviaservices

suchasZellehasbeenabletotakeoff

inVenezuelabecauseitscitizensenjoy

continuedaccesstotheU.S.financialsys-

tem,saysDarshakDholakia,a partnerat

DechertLLPinWashington,D.C.,who

advisescompaniesonsanctionscom-

pliance.“Venezuelais ina veryunique

positionofbeingtheonlycountrycur-

rentlyinwhichthegovernmentis sub-

jecttocomprehensivesanctionsbut

privatepeoplearenot,”hesays.

About8%ofadultVenezuelanshave

a foreignbankaccountoraccesstoan

e-wallet,accordingtoCaracaspollster

Datanálisis.Butthatnumberis magni-

fiedbythealmost5 millionwho’vefled

theircountry’scrisis,withhundredsof

thousandssettlingintheU.S.

That diaspora is a vital linkfor

VenezuelanusersofZellelikeGerardo

Zambrano,wholivesinthe Caracas

slumofPetare.The31-year-oldgraphic

designerhashispaychecksdeposited

intoa friend’saccountinLosAngeles

andthentextshimtoinitiatea trans-

fereverytimehewantstozapsome-

onemoney.It’snotalwaysseamless

becauseofthefour-hourtimedifference

betweenthetwocities.InAugust,when

his fatherwokeupcoveredinhives,

it tookZambranohourstorousehis

buddysohecouldbuymedicine.“I’ve

sincelearnedthatheneveranswers

beforenoon,”hesays.

Javier,a 32-year-oldjournalistliving

in Miami,whowithheldhissurname

out offearofhavinghisaccountsus-

pended,usesZelletopayforgroceries,

doctor’svisits,andhomerepairsforhis

parentsinCaracas.“Itmakesourlivesso

mucheasier,”saysJavier’sfather,Luis,a

72-year-oldretiredmechanicalengineer.

“But mysontakescareofeverything,

becausewedon’tknowhowit works.”

Venezuela’sretailers havetheir

own workarounds. Tokeepcheck-

out linesmoving,supermarketsare

equippedwithdedicatedstafftocom-

parescreencapturesofZellepayments

with emailreceipts.VanessaMora,

whoworksasa cashierata high-end

petshopinCaracas,is requiredtover-

ifythata paymentviaZellehasgone

throughbeforea shoppercanwalkout

withthemerchandise.If shedoesn’t,

she’sonthehookforit.Animpatient

customerrecentlystormedoffwith

an$83bagofdogfoodwhenthestaff

couldn’tretrievetheemailedreceipt

andweren’tabletoreachthestore’s

owner,wholivesinMiami,toconfirm

themoneyhadlandedintheaccount.

“Hecalled usa bunch ofincapable

idiots,butI wasscared,”saysMora,

whosemonthlysalaryis lessthanhalf

thepriceofthekibble.

Most of the 731 U.S. banks on

Zelle’snetworkhaven’tputupbarri-

erstoVenezuelanssigningupforbank

accounts,providedtheyaren’tonsanc-

tionslistsandused authenticdocu-

ments andmailing addresseswhen

theysignedup.Ina statement,Early

Warningsaid,“Consumerscan only

enrollintheZelleNetworkusinga U.S.

mobilenumberoremailaddressasso-

ciatedwitha U.S.basedaccount.”The

U.S.TreasuryDepartmentdeclinedto

comment,buta seniorofficial,speak-

ingontheconditionofanonymity,says

transfers betweentwoU.S.account

holderswouldn’tviolatesanctions.

Still,somebanksaregettingcagey.

InJune,reportsthatWellsFargo& Co.

hadblockedaccesstoZelleforsome

Venezuelansigniteda paniconTwitter.

Alexandra, a 35-year-old Caracas

residentwhowithheldherlastname

forfearofbeingkickedofftheservice,

saysWellsFargoabruptlysuspended

heraccesstoZellethissummerforfour

months, leavingthe public-relations

professionalscramblingforwaystocol-

lecthersalaryandpayforeverything

fromgroceriestoherchildren’sschool-

ing.NowsheusesZelleonlytobuydol-

larsfroma trustedblack-marketmoney

changer outof fearshe mightacci-

dentallysendmoneytosomeonecon-

nectedtoa sanctionedofficial.“Imagine,

howdoI traveltotheU.S.tounlockan

accountina pandemic?”shesays.

In a statement, Wells Fargo said

it removesa customer’saccessif it iden-

tifiesusage“thatis inconsistentwiththe

intendeduseoftheseproductsandser-

vices.”Banksdeploysophisticatedsoft-

waretomonitorforevidenceofactivities

thatmightrunafoulofU.S.laws,such

asmoney laundering or facilitating

paymentstoindividualswhosenames

appearongovernment-compiledlistsof

terroristsanddrugtraffickers.(InMarch

theU.S.DepartmentofJusticecharged

Maduroand 14 currentandformeroffi-

cialswithcorruptionanddrugrunning.)

It’spossiblethatWellsFargo’ssystems

“Imagine, how do I travel to the U.S.

� ThisfruitstandacceptsZelle PHOTOGRAPHS BY ANDREA HERNANDEZ BRICEÑO FOR BLOOMBERG BUSINESSWEEK

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