Venezuela bets on USDT to evade sanctions, but at what cost?

With U.S. sanctions suffocating its economy, Venezuela is exploring an unconventional solution: Tether’s USDT. Reports suggest that the Central Bank might be channeling funds through this Stablecoin, especially in oil operations.

The problem is uncomfortable: Tether is not decentralized. The issuing company has absolute power to freeze wallets if it receives orders from OFAC (the U.S. sanctions office). Having the private keys to your USDT Wallet does not protect you. In fact, in July 2025, Tether had already frozen $2.9 billion, and in 2023, it blocked over 160 addresses. Circle (USDC) does the same.

The dilemma is perverse: Venezuela is placing its trust in an asset controlled by a company subject to the laws of the country that sanctions it. It’s like asking your enemy to hold your money.

At the street level, the phenomenon is different. With an accumulated inflation of 85% in 2024, citizens and businesses are already using USDT as a store of value. In WhatsApp groups, bolívares are exchanged for Stablecoins at nearly official rates. Some oil companies are already paying salaries in USDT due to the lack of real foreign currency.

Economist Asdrúbal Oliveros describes it as a profound transformation of the Venezuelan financial system. But the harsh truth is that it offers practical solutions in the crisis in exchange for a monumental strategic risk.

As someone said online: “It’s like leaving your house keys with a stranger and hoping they don’t change the lock.”