Venezuela's Oil Trade Shifts to USDT: Financial Survival Strategies Under Sanctions and the Global Stablecoin Game

Venezuela’s state oil company (PDVSA) has shifted over 50% of its crude oil export settlements to USDT, a proportion that continues to rise in 2025. Behind this figure is Venezuela’s strategic adjustment in response to U.S. sanctions. According to Chainalysis data, Venezuela’s ranking in the global cryptocurrency adoption index jumped from 13th in 2024 to 9th in 2025, with stablecoin usage surging by 110%.

Economic Background

Since October 2024, the value of the Venezuelan bolívar has plummeted by over 70%. Faced with an annual inflation rate of 136% and ongoing international sanctions, the country has been forced to seek survival strategies outside the traditional financial system. U.S. sanctions have cut off Venezuela’s access to international credit and banking networks, making it difficult for PDVSA to receive oil payments through formal channels.

In March 2025, Venezuela’s economy contracted for the first time in two years, shrinking by 2.7% in the first quarter, further accelerating the shift toward alternative payment systems. Meanwhile, the country’s foreign exchange reserves decreased by 14% in the first seven months of 2025, with traditional dollar supplies becoming increasingly tight.

Transformation of Oil Trade

In June 2025, the Venezuelan government took a crucial step by authorizing private enterprises to convert bolívar into USDT via government-approved digital wallets. This policy rapidly changed the country’s trade landscape.

PDVSA began requiring prepayments for spot transactions to be settled in USDT, with over 50% of oil shipments involving stablecoin payments. By July 2025, approximately $119 million worth of USDT had flowed into Venezuela’s private sector within just one month. This shift is not limited to oil trade; stable digital dollars have permeated various levels of the economy. From street corner shops to cross-border remittances, USDT has become a practical tool to hedge against local currency devaluation.

Dual Application Scenarios

In Venezuela, USDT plays two roles simultaneously: as a settlement tool for national oil trade and as a lifeline for ordinary citizens. This dual application reveals the complex functions of cryptocurrency in sanctioned economies.

For PDVSA, USDT offers a way to bypass traditional banking restrictions and receive oil payments. The speed of blockchain transactions and relatively low cross-border transfer costs enable this state-owned oil giant to maintain cash flow. Meanwhile, among the general populace, as the bolívar’s purchasing power continues to evaporate, ordinary Venezuelans see USDT as a reliable means of store of value and daily transactions. Merchants are beginning to accept USDT payments, and more employees are demanding stablecoin payments for wages.

Compliance Challenges

Tether has publicly emphasized its commitment to complying with international sanctions and anti-money laundering regulations, a stance that creates subtle tension with its increasing use in Venezuela.

In 2025, Tether froze multiple wallets associated with PDVSA and other sanctioned entities, in accordance with the U.S. Office of Foreign Assets Control (OFAC) regulations. These actions highlight the fragility of centralized stablecoins in geopolitical hotspots. Tether’s compliance functions demonstrate transparency but may also weaken its practicality in sanctioned countries. The company’s cooperation with U.S. regulators means that while USDT offers a way to circumvent traditional financial restrictions, its issuer remains subject to U.S. policy frameworks.

Market and Price Dynamics

As of January 2026, the global stablecoin market has grown to approximately $277 billion, accounting for 7.04% of the entire cryptocurrency market. Within this landscape, USDT continues to dominate, with a market share of about 70% and a circulating market cap of approximately $168.8 billion. Monthly transaction volume via USDT exceeds $1 trillion, demonstrating the stablecoin’s central role in global financial flows. These figures not only reflect USDT’s market dominance but also underscore its importance as a tool for global value transfer.

Regarding price performance, stablecoins like USDT are designed to maintain a 1:1 peg with the US dollar. On major trading platforms such as Gate, USDT typically fluctuates within a narrow range around this value, and its stability is precisely why it is favored in high-inflation economies like Venezuela.

Global Regulatory Tightening

Venezuela’s situation is not isolated but reflects the increasing importance of stablecoins in global geopolitics. In July 2025, the U.S. passed the GENIUS Act, establishing a comprehensive federal regulatory framework for stablecoins.

Meanwhile, the European Union’s Markets in Crypto-Assets Regulation (MiCA) is shaping global stablecoin standards. These regulatory developments are driving demand for compliance technologies, such as blockchain analysis tools and anti-money laundering solutions.

The refinement of the global regulatory framework could lend more legitimacy to stablecoins but may also restrict their use for sanctions evasion. Balancing these factors will be a core feature of the digital asset geopolitical landscape in the coming years.

Risks and Future Outlook

Venezuela’s reliance on USDT, while providing short-term economic relief, also introduces significant risks. This “digital dollarization” process weakens the country’s monetary sovereignty and makes its economy more susceptible to external actors’ decisions.

With increasing U.S. regulatory pressure and Tether’s commitment to compliance, the long-term viability of Venezuela’s use of USDT for oil trade is uncertain. The country may explore alternatives such as China’s digital yuan or other sovereign-backed cryptocurrencies. This case highlights the contradictory role of stablecoins in sanctioned economies: as tools for financial innovation and as vehicles for circumventing international policies. For investors and policymakers, Venezuela’s experience offers valuable insights into the evolving role of digital assets in geopolitics.

By September 2025, USDT’s monthly trading volume has surpassed $1 trillion. This enormous figure not only demonstrates its penetration into the global financial system but also reflects a trend—when traditional financial channels are blocked, stablecoin transfers on blockchain networks are becoming a new “maritime route” for international oil trade.