A little-known cryptocurrency-based payment app firmly entrenched in Latin America is Reserve. The platform serves as a convenient way for people to convert their local currencies, which may have high inflation, into US dollars using Reserve Stablecoin (RSV). The network also has backup rights (Rtoken (RSR)) that are used to manage the protocol.
Since its launch in March, the platform has reported a total of 367,000 registered users. Meanwhile, the number of weekly active users has exceeded 100,000, mostly in Argentina, Venezuela and Colombia. Over the past 30 days, the app has processed around 547,000 transactions. In addition, more than 8,000 companies, mostly in Venezuela, accept reserves as payment for goods and services.
In a live demo of Cointelegraph’s Reserve app, Reserve Chairman Neven Freeman withdrew dollars from a personal US dollar account to a Venezuelan bolivar bank account through an RSV. The transaction is almost instantaneous and the application does not charge any fees. Freeman argued that users could use the bolivar immediately, for example in online transactions, or use a debit/credit card to use cash. However, liquidity providers controlled by the reserve require a difference on the first foreign exchange transaction. Below is the full interview between Cointelegraph and Freeman and Reserve Community Manager Jens Michaels.
Cointelegraph: With the growth of the blockchain industry, there are many solutions for cash payments from cryptocurrencies to cryptocurrencies, cryptocurrencies to fiat currencies. What do you think is the uniqueness of the reserve protocol?
Nevin Freeman: Reserve is a stablecoin wallet. We store cryptocurrencies in the background while users make transactions in our database. In the future, we will move to network users, but due to the [high] gas fees of Ethereum, this is the only way to introduce this tool in countries like Venezuela. Answering your question about what makes it different from others, it can be said that it is possible to deposit and withdraw funds with all these different currencies. These [the five options in the annex] represent the various Venezuelan banking methods for depositing or withdrawing funds; Argentine Peso, Panamanian Dollar, PayPal, Zelle, Uphold, Colombian Peso, our on-chain token (RSV) and many other cryptocurrency options that people are using. We recently added Axie Infinity Codes as many people in Venezuela are playing Axie Infinity. So this is an easy way to convert money into dollars.
CT: How does Reserve help customers protect themselves from inflation in the mentioned countries?
NF: Reserve app users often get paid and convert their money into our dollar stablecoin, so they don’t have to worry about their money being devalued. Then, over the course of a week or a month, they will periodically make small transactions again in the local currency to trade with the local economy. And then, often, due to the increasing number of merchants, we see more and more transactions that people do not need to convert again; They can only pay directly using stablecoins in USD.
So it’s not really rocket science. The concept is very simple. It’s like saving with dollars and living your life in dollars, which many people want to do, but the change here makes it much easier and more affordable to achieve.
Let me add another interesting point here: for example, in Venezuela, many transactions are done through Zelle, which is similar to the US bank’s way of quickly sending money between US bank accounts. All 1% in Venezuela have US bank accounts and they all have a lot of money in their US bank accounts. So there are a lot of transactions going on with Zelle. Therefore, everyone in Venezuela would like to have a Zelle account. The point is, you can only get a Zelle account if you travel to the United States and create a physical account in the United States. And many Venezuelans have no way of doing this. So, the way many of our users view the service looks like a Zelle account, but anyone can open it, and that’s part of the appeal.
CT: So far we’ve mainly discussed RSV and fiat money, but what about the RSR token? What are your plans to develop it?
NF: The main role of the law reserve symbol is control. The curve that supports any R token (as we call reserve stablecoins) must evolve over time. And you need a very secure and reliable way to decentralize this problem in the long run. Thus, RSR plays a major role in governance.