Author: Vicky Ge Huang, the Wall Street Journal
Compiled by: Peggy, BlockBeats
Original title: 80% of Oil Revenue Settled in Stablecoin, Venezuela Turns USDT into a Second Dollar
Editor's Note: From the "stablecoin of outlaws" to attempting to enter the U.S. compliant market, the role of USDT in Venezuela reveals the most real and contradictory aspect of stablecoins: they serve both as a settlement tool for oil exports to bypass sanctions and the traditional banking system, and as a financial lifeline for ordinary people to sustain their lives amid 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 pay property fees with USDT, this is not only an extreme example of crypto penetrating the real economy but also a reminder that the core controversy of stablecoins has never been just about "how well they work," but rather their inherent "dual use": becoming a lifeline where institutions fail, and an escape route in regulatory vacuums.
Below is the original text:
Nicolás Maduro has, in a way, contributed to USDT becoming the world's most dominant stablecoin. And now, as the former Venezuelan leader is held in a Brooklyn prison, the central role of this cryptocurrency in Venezuela's economy is once again in the spotlight.
For Venezuela's state-owned oil company, USDT has become a crucial tool to evade sanctions and is used as a payment currency for settling oil transactions. At the same time, Tether provides a financial "lifeline" for ordinary Venezuelans amid the ongoing devaluation of the national currency, the bolivar. Like most major stablecoins, USDT maintains a 1:1 peg to the U.S. dollar.
According to crypto industry analysts, Maduro's arrest and removal as Venezuela's president may not necessarily weaken USDT's presence in the country—after all, hyperinflation remains a long-term challenge. Meanwhile, the financial ties between Tether and Venezuela also place the cryptocurrency company in a critical position: it could become a key ally for U.S. authorities as they attempt to trace the whereabouts of funds allegedly embezzled by 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 is a self-help mechanism to cope with economic failure and institutional collapse. But the same governance failures also create space for evading sanctions—if there is no credible improvement in governance, this outcome will not change."
Maduro pleaded not guilty to drug trafficking charges in his arraignment in U.S. federal court last week.
This new phase comes as cryptocurrency company Tether and its token—once stigmatized as the "stablecoin of choice for outlaws"—are seeking acceptance in the U.S. market. Last year, legislation was passed to pave the way for broader use of stablecoins, and Tether announced plans to launch a stablecoin open to U.S. investors. If realized, this would put it on a level playing field with competitors like Circle Internet Group and Paxos. Otherwise, Tether risks being marginalized in the U.S. market.
Just last week, U.S. Energy Secretary Chris Wright stated that the U.S. would indefinitely sell blocked Venezuelan oil. He said the proceeds from the sales would be deposited into accounts controlled by the U.S. government and eventually 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 is selectively rolling back some sanctions to allow crude oil and petroleum products to be transported and sold to global markets.
Faced with escalating U.S. sanctions in 2020, Venezuela's state-owned oil company Petroleos de Venezuela (PdVSA) began requiring payments in USDT to bypass the traditional banking system. Oil export revenues are settled either by directly transferring USDT to a wallet address or by converting cash proceeds into USDT through intermediaries.
This shift has been "transformative" for the country's oil economy. Venezuelan local economist Asdrúbal Oliveros recently stated in a podcast that, according to one estimate, nearly 80% of Venezuela's oil revenue is received in the form of stablecoins like USDT.
Subsequently, Tether cooperated with U.S. authorities to freeze dozens of wallets identified as being involved in Venezuelan oil trade. A Tether spokesperson did not respond to requests for comment.
Soon after the sanctions took effect, Tether, with the ticker USDT, also became a viable alternative currency for many Venezuelans. They use this stablecoin for cross-border remittances, savings preservation, and daily payments.
Tether CEO Paolo Ardoino said at a recent crypto industry conference: "Over the past 10 years, the Venezuelan bolivar has depreciated by 99.8% against the U.S. dollar, the Turkish lira by 80%, and the Argentine peso by about 94.5%. This simple chart alone is enough to explain why USDT has succeeded."
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 her apartment's homeowners association fee.
"You pay the gardener, you pay for a haircut—everything is paid this way. Basically, you can use USDT for anything," said Di Bartolomeo, co-founder of crypto lending platform Ledn. "The penetration of stablecoins in Venezuela is so deep that even without regulated, compliant channels to buy and sell stablecoins, people still choose stablecoins over the local banking system."
Researchers say it was almost inevitable that USDT would play a major role in Venezuela—due to a lack of trust in the country's banking system and strict capital controls that limit access to physical dollars. A prime example: the Venezuelan government attempted to launch an oil-backed cryptocurrency called Petro in 2018, but it failed due to lack of public trust and international recognition.
Ari Redbord, global head of policy at blockchain analytics firm TRM Labs, said: "The issue is not with USDT itself, but with the inherent 'dual-use' reality of stablecoins." TRM Labs has partnered with Tether to track the use of stablecoins on the Tron blockchain in illegal activities. "They can be a lifeline for ordinary people and also serve as a tool to evade sanctions under pressure."
