Eighty percent of oil revenue is settled in USDT, and stablecoins have become Venezuela's "second dollar."

Author: Vicky Ge Huang, The Wall Street Journal

Translation: Peggy, BlockBeats

Original Title: 80% of Oil Revenue Settled in Stablecoins, Venezuela Turns USDT into the Second Dollar

Editor’s Note: From “Outlaw Stablecoins” to attempting to enter the U.S. compliant market, the role of USDT in Venezuela reveals the most authentic and contradictory aspects of stablecoins: they are both a settlement tool for oil exports to bypass sanctions and traditional banking systems, and 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 income is managed through stablecoins, and even the elderly pay property fees with USDT, it is not only an extreme example of crypto penetrating the real economy but also a reminder: the core controversy of stablecoins has never been just “how good or bad they are,” but their inherent “dual-use” nature: becoming a lifeline when institutions fail, and an escape route in regulatory vacuum.

Below is the original text:

Nicolás Maduro, to some extent, facilitated USDT becoming the world’s leading stablecoin. Now, this former Venezuelan leader is detained in a prison in Brooklyn, and the central role of this cryptocurrency in Venezuela’s economy has once again become a focus of external attention.

For Venezuela’s state oil company, USDT has become an important tool to evade sanctions and is used as a settlement currency for oil transactions. Meanwhile, under the ongoing devaluation of the national currency, the Bolivar, Tether also provides a financial “lifeline” for ordinary Venezuelans. Like most mainstream stablecoins, USDT is pegged 1:1 to the US dollar.

According to crypto industry analysts, Maduro’s arrest and removal from the presidency may not weaken USDT’s presence locally—after all, hyperinflation remains a long-term problem. At the same time, the financial ties between Tether and Venezuela place the crypto company in a critical position: as U.S. authorities attempt to trace the funds allegedly stolen by Maduro’s regime, Tether could become an important aid.

Adam Zarazinski, CEO of crypto intelligence firm Inca Digital, said: “Cryptocurrency use 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 failure also provides space for sanctions evasion—if governance does not improve credibly, this outcome will not change.”

Last week, Maduro appeared in U.S. federal court and pleaded not guilty to drug trafficking charges.

As a new phase begins, crypto company Tether and its tokens (once stigmatized as “the outlaw’s preferred stablecoin”) are seeking recognition in the U.S. market. Last year, legislation was passed to pave the way for broader stablecoin use; Tether also announced plans to issue a stablecoin open to U.S. investors. If successful, this would put it on the same level as 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. will sell blocked Venezuelan oil indefinitely. He said the proceeds 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 official from the Trump administration also told The Wall Street Journal that the government is selectively rolling back some sanctions to allow crude oil and oil products to be transported and sold to global markets.

In response to the escalating U.S. sanctions in 2020, Venezuela’s state oil company, Petróleos de Venezuela, S.A. (PdVSA), began requiring payments in USDT to bypass traditional banking systems. Oil export revenues are either transferred directly to a wallet address in USDT or converted from cash income via intermediaries.

This shift represents a “transformative change” for the country’s oil economy. Venezuelan economist Asdrúbal Oliveros recently stated in a podcast that, according to an estimate, nearly 80% of Venezuela’s oil revenue is received in stablecoins like USDT.

Subsequently, Tether cooperated with U.S. authorities to freeze dozens of wallets linked to Venezuelan oil trade. Tether’s spokesperson did not respond to requests for comment.

Shortly after sanctions took effect, USDT became a feasible alternative currency for many Venezuelans. They use this stablecoin for cross-border remittances, savings, and daily payments.

Tether CEO Paolo Ardoino said at a recent crypto industry conference: “Over the past 10 years, the Venezuelan Bolivar has depreciated 99.8% against the dollar, the Turkish Lira 80%, and the Argentine Peso about 94.5%. Just this simple chart is enough to explain why USDT has succeeded.”

Venezuelan-born 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 her apartment association fees.

“You pay the gardener, you pay for a haircut, all with this. Basically, you can use USDT for everything,” said Di Bartolomeo, co-founder of the crypto lending platform Ledn. “Stablecoin penetration in Venezuela has reached such a level: even without regulated channels for buying and selling stablecoins, people still choose stablecoins rather than using the local banking system.”

Researchers say that USDT’s important role in Venezuela is almost unavoidable—due to the public’s lack of trust in the domestic banking system and strict capital controls limiting access to physical dollars. A typical example is: in 2018, the Venezuelan government attempted to launch a crypto-backed by oil called Petro, but due to public distrust and lack of international recognition, it ultimately failed.

Ari Redbord, head of global policy at blockchain analytics firm TRM Labs, said: “The issue is not with USDT itself, but with the ‘dual-use’ reality inherent in stablecoins.” TRM Labs has partnered with Tether to track illegal activities involving stablecoins on the Tron blockchain. “They can be a lifeline for ordinary people, but they can also be tools for sanctions evasion under pressure.”