Venezuela's cryptocurrency usage has surged 110% over the past year, becoming the preferred wealth protection method amid 230% inflation rates. From corporate payrolls to university curricula, USDT is reshaping the nation's economic landscape.
In Venezuela, cryptocurrency is transforming from a peripheral sector into an economic cornerstone. Facing domestic currency collapse and government crackdowns on black market dollar transactions, blockchain technology has become citizens' "digital fortress" for wealth preservation.
From family-owned shops to national retail chains, merchants are increasingly accepting payments through digital wallet platforms like Binance and Airtm, with some companies even paying employee salaries in cryptocurrency. One of the country's leading universities now offers cryptocurrency courses.
"Many places accept cryptocurrency now," said shopper Victor Sousa while purchasing mobile phone accessories with USDT, a dollar-pegged stablecoin. "My goal is to convert all my savings to cryptocurrency in the future."
Even before the bolívar's collapse in late 2023, cryptocurrency adoption in Venezuela was already experiencing explosive growth. According to blockchain analytics firm Chainalysis, Venezuela's cryptocurrency usage surged 110% in the 12 months leading to June 2024, ranking 13th globally in cryptocurrency adoption rates.
Since the government abandoned defending the bolívar in October 2023, public demand for safe-haven assets has peaked. Data from the independent Venezuelan Finance Observatory (OVF) shows the bolívar depreciated over 70% between October 2023 and June 2024, with the country's annual inflation rate soaring to 229% in May 2024.
"Venezuelans use cryptocurrency out of survival necessity," noted economist Aarón Olmos from the Institute of Higher Management Studies in Caracas. "They must cope with inflation, low wages, foreign exchange shortages, and numerous barriers to opening bank accounts."
To support the bolívar, authoritarian President Nicolás Maduro has arrested dozens of individuals operating black market dollar exchange rate websites, accelerating public acceptance of cryptocurrency. Venezuela's central bank has stopped publishing inflation data since October 2023, independent economists have been arrested, and OVF suspended data publication since May 2024 due to government harassment of its members.
Despite the Trump administration allowing Chevron to resume oil production and exports in Venezuela last month—which the opposition calls a "lifeline" for Maduro—Venezuela remains under comprehensive sanctions. Some citizens who began using cryptocurrency during the 2016-2019 hyperinflation period remain cautious.
"In our distorted economy, sound judgment matters more than capital," said Aníbal Garrido, director of the cryptocurrency program at Andrés Bello Catholic University in Caracas.
Even some Venezuelan government officials have ventured into cryptocurrency, with several officials facing U.S. prosecution for using virtual currencies to evade sanctions or launder money. The government's own attitude toward cryptocurrency has been inconsistent: it launched the world's first national cryptocurrency "petro" in 2018, linking 50% of minimum wage to the petro, but the project was terminated in 2023 due to lack of market acceptance. In 2023, the Maduro government shut down the main cryptocurrency exchange regulatory agency after senior officials were accused of misappropriating oil-related crypto transaction funds.
However, USDT usage continues to expand. Gabriel Santana, an accountant at a hardware store in Caracas, frequently uses USDT to pay suppliers and employee salaries. Despite conversion losses, the speed of inflation and bolívar depreciation offsets these costs. "When we receive large amounts of bolívars, we buy USDT on Binance. Though we lose in the short term, we profit in the long run."
For Venezuelan citizens, accessing cryptocurrency is not easy. Due to U.S. sanctions on the country's banking sector, Binance—fined $4.3 billion in 2023 for anti-money laundering failures—has restricted business dealings with sanctioned banks and frozen related accounts. "Platforms, infrastructure, and even basic network services are limited, but even so, an ecosystem is forming," Garrido said. "In adversity, a more rational and insightful community is emerging."
Shop owners in downtown Caracas believe accepting cryptocurrency payments has become a competitive necessity. Masiel Bronco, who runs a tech shop, says refusing USDT payments would result in losing customers. "The competition is too intense."