Author: Vicky Ge Huang, the Wall Street Journal
Compiled by: Peggy, BlockBeats
Original title: Venezuela uses stablecoins to settle 80% of its oil revenue, turning USDT into a second US dollar.
Editor's Note: From being a "stablecoin for outlaws" to attempting to enter the compliant US market, USDT's role in Venezuela reveals the most real and contradictory aspect of stablecoins: it is both a settlement tool for oil exports to bypass sanctions and the traditional banking system, and a financial lifeline for ordinary people to maintain their lives under the collapse of the Bolivar and capital controls.
When nearly 80% of a country's oil revenue is taken over by stablecoins, and even the elderly have to use USDT to pay their property fees, this is not only an extreme example of cryptocurrencies penetrating the real economy, but also a reminder that the core controversy surrounding stablecoins has never been just about whether they are "easy to use" or not, but rather their inherent "dual purpose": to become a lifeline where the system fails, and also an escape route in regulatory vacuums.
The following is the original text:
Nicolás Maduro played a significant role in making USDT the world's most dominant stablecoin. Now, with the former Venezuelan leader imprisoned in a Brooklyn jail, the cryptocurrency's central role in the Venezuelan economy is once again in the spotlight.
For Venezuela's state-owned oil company, USDT has become an important tool for circumventing sanctions and is used as the payment currency for settling oil transactions. Meanwhile, amid the continued depreciation of the Venezuelan bolivar, Tether also provides a financial lifeline for ordinary Venezuelans. Like most mainstream stablecoins, USDT is pegged 1:1 to the US dollar.
According to crypto industry analysts, Maduro's arrest and removal from the Venezuelan presidency may not necessarily weaken USDT's presence in the country—after all, hyperinflation remains a long-term problem. Meanwhile, Tether's financial ties with Venezuela place the cryptocurrency company in a crucial position: it could become a significant facilitator as US authorities attempt to trace the whereabouts of funds allegedly stolen from the Maduro regime.
Adam Zarazinski, CEO of crypto intelligence firm Inca Digital, stated, "The use of cryptocurrency in Venezuela will continue and is likely to expand in the short term. For ordinary users, it serves as a self-help mechanism against economic failure and institutional collapse. However, the same governance failures also provide opportunities to circumvent sanctions—and this outcome will not change unless there is a credible improvement in governance."
Maduro pleaded not guilty to drug trafficking charges during his arraignment in a U.S. federal court last week.
As a new phase begins, cryptocurrency company Tether and its token (once stigmatized as "the stablecoin of choice for outlaws") are seeking acceptance in the US market. Last year, legislation paved the way for wider adoption of stablecoins; and Tether announced plans to issue a stablecoin open to US investors. If successful, this would put it on par with competitors like Circle Internet Group and Paxos. Otherwise, Tether risks being marginalized in the US market.
Just last week, U.S. Energy Secretary Chris Wright stated that the U.S. would sell blocked Venezuelan oil indefinitely. He said the proceeds would be deposited into an account controlled by the U.S. government and ultimately transferred to the Latin American country to "benefit the Venezuelan people." A senior Trump administration official also told the Wall Street Journal that the government was selectively lifting some sanctions to allow crude oil and petroleum products to be transported and sold to global markets.
Faced with escalating US sanctions in 2020, Venezuela's state-owned oil company, Petroleos de Venezuela (PdVSA), began requiring payments to be made in USDT to bypass the traditional banking system. Oil export revenue was settled either by directly transferring USDT to a specific wallet address or by using an intermediary to convert cash revenue into USDT.
This shift can be described as a "reshaping change" for the country's oil economy. Venezuelan economist Asdrúbal Oliveros recently stated on a podcast that, according to one estimate, nearly 80% of Venezuela's oil revenue is received in the form of stablecoins such as USDT.
Subsequently, Tether cooperated with U.S. authorities to freeze dozens of wallets identified as being linked to Venezuelan oil trade. A Tether spokesperson did not respond to requests for comment.
Shortly after the sanctions took effect, Tether, with the trading code USDT, became a viable alternative currency for many Venezuelans. They used this stablecoin for cross-border remittances, as a store of value, and for everyday payments.
At a recent crypto industry conference, Tether CEO Paolo Ardoino stated, "Over the past 10 years, the Venezuelan bolivar has depreciated by 99.8% against the US dollar, the Turkish lira by 80%, and the Argentine peso by approximately 94.5%. This simple chart alone is enough to explain why USDT has been successful."
Mauricio Di Bartolomeo, a crypto entrepreneur born and raised in Venezuela, said that two months ago, his 71-year-old aunt called him because she needed to buy some USDT to pay the apartment owners' association management fees.
"You pay your gardener, you pay your hairdresser, that's how you pay. Basically, you can use USDT for everything," said Di Bartolomeo, co-founder of the crypto lending platform Ledn. "Stablecoins have penetrated so deeply in Venezuela that even without regulated, compliant channels for buying and selling stablecoins, people will still choose stablecoins instead of using the local banking system."
Researchers say that USDT playing a significant role in Venezuela is almost inevitable—due to a lack of public trust in the country's banking system and strict capital controls that limit their access to physical US dollars. A prime example is the Venezuelan government's 2018 attempt to launch Petro, an oil-backed cryptocurrency, which ultimately failed due to insufficient public trust and a lack of international acceptance.
"The problem isn't with USDT itself, but with the inherent 'dual-use' reality of stablecoins," said Ari Redbord, Global Head of Policy at blockchain analytics firm TRM Labs. TRM Labs has partnered with Tether to track the use of stablecoins in illicit activities on the Tron blockchain. "They can be a lifeline for ordinary people, but they can also be used as a tool to circumvent sanctions under pressure."
