TLDR
- Venezuela’s 229% inflation rate has made USDt stablecoins the preferred currency for daily transactions
- Citizens use “Binance dollars” for groceries, rent, and salaries instead of the worthless bolívar
- Venezuela ranks 9th globally for crypto adoption per capita with 110% growth in usage last year
- Three competing USD exchange rates exist, with USDt at 219.62 bolívars per dollar being most popular
- Local banks now sell USDt to businesses to circumvent US sanctions and banking restrictions
Venezuela’s economy continues its downward spiral as annual inflation reaches 229%, pushing millions of citizens to abandon their national currency for digital alternatives. The bolívar has become practically worthless for daily commerce, forcing Venezuelans to embrace Tether’s USDt stablecoin as their de facto currency.
Local residents call USDt “Binance dollars” and use it for everything from buying food to paying employees. Small businesses, apartment buildings, and service providers now quote all prices in the stable digital currency rather than the volatile bolívar.
Mauricio Di Bartolomeo, who fled Venezuela before co-founding cryptocurrency platform Ledn, explains that the stablecoin serves as both a reliable dollar substitute and financial equalizer across social classes. The shift affects everyone from street vendors to large corporations.
Complex Exchange Rate System Favors Crypto
Venezuela operates three separate USD exchange rates that create confusion and inefficiency. The government’s official Central Bank rate sits at 151.57 bolívars per dollar, while parallel markets trade at 231.76 bolívars per USD.
USDt trades at 219.62 bolívars per dollar on Binance, offering better liquidity and reliability than other options. Most private businesses prefer this rate over government-controlled alternatives that favor regime-connected companies.
State entities must use official rates, but private markets overwhelmingly choose the Binance dollar for its accessibility and stability. This preference has accelerated crypto adoption across all economic sectors.
Record-Breaking Crypto Growth
Venezuela now ranks 18th globally for cryptocurrency adoption, climbing to 9th place when adjusted for population size. According to Chainalysis data, crypto activity surged 110% last year as economic conditions worsened.
Stablecoins accounted for 47% of all Venezuelan crypto transactions under $10,000 in 2024. This heavy reliance on dollar-pegged tokens reflects citizens’ desperate need for monetary stability.
Government capital controls have created parallel markets where digital assets thrive. Official USD allocations go to politically connected firms who resell dollars at inflated rates, pushing ordinary citizens toward cryptocurrency alternatives.
Financial Institutions Embrace Digital Currency
Recent US sanctions on Venezuela’s oil sector have pushed even traditional banks toward stablecoins. Some local financial institutions now sell USDt directly to businesses in exchange for bolívars to avoid international restrictions.
Oil companies and other major industries increasingly rely on cryptocurrency for operations. This institutional adoption shows how deeply stablecoins have penetrated Venezuela’s economy beyond individual users.
When businesses reluctantly accept bolívars, they immediately convert the worthless currency into stablecoins or physical dollars. This rapid conversion demonstrates the complete loss of confidence in Venezuela’s monetary system.
Local banks selling USDt to businesses represents the latest development in Venezuela’s ongoing currency crisis.
