80% of Oil Revenue Settled in Stablecoins, Venezuela Turns USDT into Second Official Currency
Original Article Title: Maduro's Crypto-Backed Oil Deals Put Tether at Center of Venezuela Money Drama
Original Author: Vicky Ge Huang, the Wall Street Journal
Translation: Peggy, BlockBeats
Editor's Note: From a "fugitive's stablecoin" to attempting to enter the US compliant market, USDT's role in Venezuela reveals the most authentic and contradictory side of stablecoins: it serves as both a tool for bypassing oil export sanctions and the traditional banking system's settlement, as well as a financial lifeline for ordinary citizens to sustain themselves amid the Bolivar's collapse and capital controls.
When a nation's nearly 80% oil revenue is taken over by a stablecoin and even the elderly have to pay property fees in 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 useful they are," but rather their inherent "dual use": becoming a lifeline where systems fail and an escape route in regulatory vacuums.
The following is the original article:
Nicolás Maduro, to some extent, facilitated USDT becoming the world's most dominant stablecoin. And now, as this former Venezuelan leader is incarcerated in a Brooklyn prison, the cryptocurrency's central role in the Venezuelan economy has once again become the focus of external attention.
For the Venezuelan state-owned oil company, USDT has become a key tool to evade sanctions and is used as the payment currency for settling oil transactions. Meanwhile, amidst the continuous devaluation of the national currency Bolivar, Tether has also provided an economic "lifeline" for ordinary Venezuelan citizens. Like most mainstream stablecoins, USDT is pegged 1:1 to the US dollar.
According to analysts in the crypto industry, Maduro's arrest and removal from the Venezuelan presidency may not necessarily weaken USDT's presence in the region—after all, hyperinflation remains a long-standing challenge. At the same time, the financial ties between Tether and Venezuela have placed this cryptocurrency company in a crucial position: as US authorities try to trace the funds stolen by the Maduro regime, Tether could be a vital assisting force.
Adam Zarazinski, CEO of crypto intelligence company 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-remedy mechanism to cope with economic dysfunction and institutional collapse. However, the same governance failure also provides space for evading sanctions—if there is no credible improvement in governance, this outcome will not change."
Maduro, last week in a US federal court arraignment, pleaded not guilty to drug trafficking charges.
As a new era dawns, cryptocurrency firm Tether and its token (once stigmatized as the "outlaw's stablecoin of choice") are seeking US market acceptance. Last year, legislation was passed to pave the way for broader stablecoin adoption, and Tether has announced plans to launch a stablecoin open to US investors. If successful, this would put it on par with competitors like Circle Internet Group and Paxos. Otherwise, Tether is likely to be marginalized in the US market.
Just last week, US Energy Secretary Chris Wright stated that the US will indefinitely sell seized Venezuelan oil. He said the proceeds from the sales will be deposited into accounts controlled by the US 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 relaxing some sanctions to allow crude oil and oil products to be transported and sold in the global market.
Facing escalating US sanctions in 2020, Venezuela's state-owned oil company, Petroleos de Venezuela (PdVSA), has begun demanding payment using USDT to circumvent the traditional banking system. Oil export revenue is either settled by transferring USDT directly to a wallet address or by using intermediaries to convert cash revenue to USDT.
This shift is a "transformative change" for the country's oil economy. Asdrúbal Oliveros, a local Venezuelan economist, recently stated on a podcast that an estimate suggests nearly 80% of Venezuela's oil revenue is received in stablecoins like USDT.
Subsequently, Tether collaborated with US authorities to freeze dozens of wallets identified as being related to Venezuelan oil trading. A Tether spokesperson did not respond to requests for comments.
Shortly after the sanctions took effect, Tether, with the trading code USDT, became a viable alternative currency for many Venezuelans. They use this stablecoin for cross-border remittances, value preservation, and daily transactions.
Tether CEO Paolo Ardoino stated at a recent cryptocurrency industry conference, "In the last 10 years, the Venezuelan Bolivar has devalued by 99.8% against the US dollar, the Turkish Lira by 80%, and the Argentine Peso by about 94.5%. With just this simple chart, it is enough to explain why USDT has been successful."
Born and raised in Venezuela, crypto entrepreneur Mauricio Di Bartolomeo said that two months ago, his 71-year-old aunt called him because she needed to buy some USDT to pay the condo association fees.
“You pay the gardener, you pay the barber, all like this. Basically, USDT is what you use for everything,” said Di Bartolomeo, co-founder of the crypto lending platform Ledn. “Stablecoins have penetrated Venezuela to the point where even if you don’t have a regulated compliant channel to buy and sell stablecoins, people will still opt for stablecoins over using the local banking system.”
Researchers say USDT’s role in Venezuela is almost inevitable—due to a lack of trust in the country’s banking system and strict capital controls that limit avenues to access physical U.S. dollars. A typical example: the Venezuelan government tried to launch a cryptocurrency backed by oil, Petro, in 2018 but it failed due to lack of public trust and international recognition.
Ari Redbord, Global Head of Policy at blockchain analytics company TRM Labs, said, “The issue isn’t with USDT itself, but with the inherent ‘dual-use’ reality of stablecoins.” TRM Labs has partnered with Tether to track stablecoin usage involving illicit activities on the Tron blockchain. “They can be a lifeline for regular people and, under sanctions pressure, a tool for sanctions evasion,” he said.
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