Venezuela’s Bet on USDT: Evading Sanctions at the Expense of National Autonomy?

Venezuela’s authorities have ramped up their use of Tether’s

stablecoin as a means to cope with a worsening economic downturn characterized by runaway inflation, U.S. sanctions, and the near disappearance of the bolívar. By September 2025, the state-run oil company Petróleos de Venezuela S.A. (PDVSA) had moved a large share of its global oil transactions to USDT, sidestepping conventional dollar routes blocked by sanctions. This move, along with growing use by private companies and citizens, highlights a deliberate shift toward digital currencies as a crucial support during financial distress.

Since October 2024, the bolívar has depreciated by more than 70%, and annual inflation soared to 229% as of May 2025. In response, the government permitted private firms to exchange bolívars for USDT using state-approved digital wallets, injecting $119 million into the private sector in July 2025 alone. PDVSA’s use of USDT for half of its oil sales signals a broader embrace of stablecoins to keep trade moving while avoiding U.S. sanctions.

This shift points to a wider, unofficial dollarization through digital assets. Stablecoins now play a central role in everyday payments, wages, and remittances, with Venezuela ranking ninth worldwide in crypto adoption according to Chainalysis 2025 figures. More than 9% of the $5.4 billion in remittances sent to Venezuela in 2023 arrived via cryptocurrency, cutting costs and speeding up transfers compared to traditional methods. Still, this heavy use of USDT raises questions about Venezuela’s control over its own currency, as outside parties like

and U.S. authorities exert indirect influence over the country’s financial landscape.

U.S. regulatory measures have complicated Venezuela’s approach. Tether has blocked wallets associated with PDVSA and other sanctioned organizations, enforcing U.S. sanctions compliance. The Office of Foreign Assets Control (OFAC) has increased oversight of stablecoin providers, introducing new risks to Venezuela’s digital dollar system. Despite these obstacles, USDT’s leading position—making up 70% of the $277 billion stablecoin market—ensures it remains vital for economic transactions.

Experts warn that although USDT offers immediate relief, it deepens Venezuela’s long-term reliance on external systems. The country’s economy shrank by 2.7% in the first quarter of 2025, and forecasts predict 162% inflation for the year. The government’s foreign currency injections—totaling $2 billion in the first seven months of 2025, a 14% drop from the previous year—have further increased dependence on USDT. This path may also contribute to fragmentation in the global financial order, as countries like China seek alternatives to the U.S. dollar’s dominance.

Venezuela’s embrace of USDT illustrates both the benefits and risks of stablecoins: they offer a lifeline for struggling economies but can also spark geopolitical friction. As the bolívar continues to lose value, Venezuela’s digital dollarization could serve as a model for other nations in crisis, though it also heightens vulnerability to outside economic and regulatory forces.