In Venezuela, inflation is at 229%, and now stablecoins like $USDT have effectively replaced the bolivar

Massive Shift to Stablecoins

The adoption of USDT in Venezuela has surged as stablecoins replace the bolivar for daily payments amid 229% inflation; USDT provides price stability and liquidity, allowing salaries, products, and supplier settlements to be denominated and settled in stablecoins, Venezuela’s 229% inflation rate, as noted in recent economic data, has driven widespread adoption of stablecoins like USDT, enabling transactions via Crypto Wallets (Trust Wallet, Binance) and P2P platforms like Binance, P2P and LocalBitcoins, even without traditional banking infrastructure.

Venezuela’s economic crisis has reached a tipping point, where stablecoins have effectively replaced the national currency for everyday transactions.

^{Venezuela’s rampant inflation, reaching 172% in April 2025 per Trading Economics, has driven businesses and individuals to adopt stablecoins like USDT, with prices increasingly set in USD or its equivalents, reflecting a de-facto dollarization trend that challenges the bolivar’s relevance.}

The use of Telegram bots for USDT transfers highlights an innovative workaround, reflecting a 2024 Chainalysis report showing Venezuela’s 9th global ranking in per capita crypto adoption, fueled by the bolívar’s collapse.

^{Research from Chainalysis ranks Venezuela 18th globally and 9th per capita in crypto adoption, reflecting a practical response to hyperinflation, where the bolívar lost over 99% of its value since 2016, per Steve Hanke’s inflation data.}

This shift challenges the narrative of centralized currency dominance, with peer-reviewed studies (e.g., IMF Working Paper No. 2023/045) suggesting stablecoins could stabilize economies in hyperinflationary contexts, though risks like regulatory uncertainty remain.

The Scale of Crypto Adoption

Chainalysis reports that 47% of all crypto transactions under $10,000 in Venezuela last year involved stablecoins, and overall crypto activity more than doubled. Stablecoins—especially Tether’s USDT, locally referred to as « Binance dollars »—are rapidly replacing the bolivar for everyday transactions, from products to salaries.

Currently, there are three exchange rates for the US dollar in Venezuela. The official rate of the Central Bank (BCV) is 151.57 bolivars per dollar, the parallel market rate is 231.76, and the USDt rate on Binance is 219.62.

Socioeconomic Consequences

In Venezuela, the preference for stablecoin transactions now surpasses the preference for the local currency or bank transfers. Companies and individuals prefer to set prices in US dollars and receive payments in the same currency.

Stablecoins maintain value by pegging to assets like the US dollar, with Tether (USDT) holding $118.4 billion in reserves as of August 2024, offering Venezuelans a hedge against hyperinflation, unlike traditional money market funds vulnerable to redemption risks, per Wikipedia’s analysis of fiat-backed stablecoin structures.

This shift challenges mainstream economic narratives of central bank dominance, as Venezuelans bypass banks using P2P platforms and Telegram bots, a grassroots dollarization trend accelerated by the government’s 2019 currency control relaxation, which briefly boosted the economy before faltering in 2023 amid sanctions and oil income drops, per Reuters.

This is a real « live experiment » of mass dollarization through cryptocurrencies! Venezuela is demonstrating how stablecoins can become a parallel currency system in the face of hyperinflation, effectively creating a decentralized dollarization of the economy. This could become a model for other countries with unstable currencies!