Changes in the financial landscape: U.S. bans Zelle in Venezuela, Argentina celebrates Javier Milei's victory in the presidency
In a surprising turn in the financial realm, the United States has decided to ban the use of Zelle in Venezuela as of November 30, 2023. This peer-to-peer (P2P) payments platform, owned by seven of the largest banks in the United States, is affected by restrictions imposed by the Office of Foreign Assets Control (OFAC). The move adds to previous decisions by banks such as Wells Fargo and CHASE, which had already restricted the use of Zelle in Venezuela due to improper practices and concerns about scams.
U.S. Blocks Zelle in Venezuela:
Zelle, a tool widely used by Venezuelans amid the economic crisis, has faced growing challenges. Dollarization in the country, driven by the collapse of the bolivar and hyperinflation, made this platform essential for many transactions. However, its improper use, including the use of personal accounts to receive business payments and third-party deposits, led to the imposition of restrictions by some U.S. banks.
The Zelle scams have triggered a series of legal problems and refunds to victims, generating uncertainty about the future of the app in Venezuela. Although the platform seeks to address financial risks and scams globally, the U.S. decision adds a new level of uncertainty for the financial community and Zelle users in Venezuela.
Argentina celebrates Javier Milei's victory:
In another high-profile event, Javier Milei has been elected president of Argentina, marking the end of an impoverishing model in his words. In his first speech, Milei stressed the need to rebuild the country, put an end to the omnipresent state model, and embrace the ideas of freedom. Acknowledging the gravity of the economic situation, Milei urged swift action to avoid the worst crisis in the country's history.
Economic Challenges and Short-Term Prospects:
Argentina faces significant economic challenges, with inflation at 140% annually and a fall in real wages. Regardless of who takes office, the economy is expected to see an improvement in the medium term. Factors such as agricultural production, the transformation in the hydrocarbon equation and lithium extraction offer hopes for higher revenues and trade surpluses, although debates persist about the need for dollars versus the importance of reducing public spending.
The financial landscape in Latin America is constantly changing, with the U.S. taking significant steps by banning Zelle in Venezuela and Argentina choosing a new path with Javier Milei's victory. Uncertainty and economic challenges remain, but hope is focused on income opportunities from key sectors. Future stability will depend on the ability to address these challenges and find balanced solutions.
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