Venezuela Turns to Stablecoins as Locals Battle Soaring Inflation

TLDR

• Venezuelans are using stablecoins like USDT to protect their money from hyperinflation and currency collapse.
• Retail users prefer peer-to-peer platforms to access stablecoins at better rates than the official government exchange.
• The government uses TRON-based USDT separately to manage oil revenue transactions which differ from public usage.
• Some government-linked USDT wallets were frozen following the arrest of President Maduro by US forces.
• Stablecoins have replaced other cryptocurrencies like Bitcoin and Ethereum for everyday transactions in Venezuela.

Residents in Venezuela continue turning to stablecoins as a practical solution to rising inflation and currency collapse, and as the local bolivar loses all real value, more citizens are relying on digital dollars for everyday transactions and remittances through easier access across platforms and wallets.

USDT Adoption Grows Among Citizens

Retail users in Venezuela use stablecoins like USDT to shield their money from inflation. The bolivar has lost nearly all of its value. Stablecoins provide access to a more stable currency for daily transactions.

Platforms such as Binance enable peer-to-peer trading, which has expanded access. Venezuelans often use VPNs to reach these services. This access allows them to trade USDT beyond the government’s control.

The state’s official exchange rate is often worse than the rate on the street. Therefore, people prefer trading at unofficial rates. This makes USDT attractive for buying goods and receiving remittances.

USDT is frequently used in small amounts by individuals. These retail transactions often avoid detection or restrictions. Thus, people can preserve some of their financial freedom.

Venezuela State Uses USDT for Oil

Venezuela’s government also uses USDT, but for different reasons. Reports show it handles oil revenues with USDT on the TRON network. This creates a divide between retail and state usage.

Recent events disrupted some of these operations. After the arrest of President Maduro, $182M worth of USDT was frozen. Tether has not identified the wallets involved.

There are no confirmed links between those wallets and oil trade. However, US authorities monitor TRON-based USDT closely. The government’s activity remains separate from local users’ daily transactions.

Tether has scaled back operations in Venezuela. Still, retail users access stablecoins through third-party apps. These include global exchanges and digital wallets.

Stablecoins Become Mainstream

Many Venezuelan merchants now accept stablecoins. Dollarized transactions have become part of daily commerce. The trend continues despite economic instability.

Stablecoins displaced bitcoin and ether for regular payments. Their stable price makes them more practical for everyday use. Users prefer USDT for its predictability.

He added, “Wherever they have limitations around dollars flowing freely, stablecoins are going to bust through the door.” The quote shows stablecoins as a workaround.

At times, the price of USDT has surged locally. Reports say prices reached up to $1.40 per USDT. This happens due to demand and limited access.

The Venezuelan bolivar traded at 0.15 per USD ten years ago. Today, it has no effective purchasing power. Hyperinflation pushed citizens to crypto as a survival tool.

Tether-based payments offer more stability than cash. People use stablecoins for groceries, rent, and school fees. These transactions often bypass traditional banking.

Crypto use in Venezuela started over a decade ago. P2P platforms fueled this early growth. Now, access is more streamlined and widespread.

Wallets and apps offer faster transactions. Regional and global apps support stablecoin access. This helps users transact without facing currency loss.

Stablecoins like USDT remain the preferred digital dollar. Despite restrictions, they circulate actively in the economy. Their use is driven by everyday necessity.

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