Alberto Holland is a contributor at Guacamaya.
Guacamaya, September 23, 2025. The Venezuelan economy has effectively become highly dollarized. Due to hyperinflation of the bolivar and the ongoing shortage of physical US dollars, the stablecoin Tether (USDT) has emerged as a significant safe haven for citizens and, more recently, for state operations.
USDT, or Tether, is utilized by millions as a store of value and for everyday transactions. Reports indicate that PDVSA and the Central Bank of Venezuela (BCV) have started using USDT to receive payments for oil exports. Economists have also noted that the BCV is liquidating millions in USDT for foreign exchange interventions, and there’s discussion about the governing body allocating the stablecoin to private companies.
However, Tether Limited’s centralized control presents a significant risk: the firm can freeze or block funds if requested by authorities like OFAC (the US Office of Foreign Assets Control). By July 2025, Tether had frozen more than $2.9 billion tied to illegal activities or regulatory orders.
Seeking Alternatives for Everyday Users and the Venezuelan State
The widespread usage of USDT in Venezuela has eased the effects of inflation and the scarcity of physical foreign currency. It offers liquidity in a stable currency, enabled through rapid exchange methods like P2P, and allows Venezuelans abroad to send remittances home efficiently and affordably. Moreover, this route serves as a partial workaround for the Venezuelan government against OFAC sanctions.
Nonetheless, this reliance creates a risk concentrated on a single stablecoin, making both citizens and the state vulnerable to external decisions out of their control. In light of this, exploring options that enhance financial sovereignty is essential.
Diversifying into other crypto assets, decentralized stablecoins, and forging strategic agreements with international partners are vital steps to ensuring economic stability and reducing potential impacts from restrictions on USDT. This is particularly pressing given the unpredictable nature of decisions by the US government.
For Everyday Users
For Venezuelans, total reliance on USDT could lead to a sudden loss of access to savings, payments, and remittances if USDT is blocked. This concern stems from past incidents where excessive compliance with sanctions by private companies has heavily affected users with no ties to the government, punishing them preemptively.
To mitigate these risks, citizens could:
- Diversify into USDC and other currencies.
- Retain part of their assets in Bitcoin (BTC) as a non-censorable option.
- Utilize local P2P platforms for swift exchanges.
For the Venezuelan State
The Venezuelan government might take a similar approach, although with additional risks to consider, both from a legal perspective and market volatility. In the short term, diversifying its digital asset portfolio seems the wisest course.
Some decentralized options include DAI, a stablecoin pegged to the dollar and backed by crypto assets via smart contracts on the Ethereum blockchain, with issuance managed by MakerDAO, a decentralized autonomous organization. Although DAI’s usability and liquidity don’t match USDT’s levels, it provides an alternative to potential actions against Tether.
Additionally, options like EURI, a stablecoin linked to the euro’s value, are gaining traction, but are subject to European digital asset regulations (MiCA), creating another legal hurdle for the Venezuelan state. EURI is issued by Banking Circle S.A., a bank located in Luxembourg.
Of course, there are also more volatile alternatives, like Bitcoin (BTC) or Ethereum (ETH). Each has its pros and cons, but they represent viable avenues to circumvent traditional system sanctions. Specifically, BTC features a capped supply of coins (21 million), and many view it as a new store of value.
Countries like El Salvador have already begun building their reserves in BTC, and recently the United States announced its strategic crypto asset reserve (though currently consisting of seized assets rather than purchases), underscoring the geopolitical significance of such assets.
Breaking Free from Tether: The Path Forward
Venezuela’s reliance on USDT is a double-edged sword: useful against inflation and sanctions, yet it also exposes the nation to US regulatory control. A blockage could have catastrophic consequences for both citizens and the State. The sensible course of action involves diversifying into decentralized alternatives while strengthening international ties to lessen dependency on a single centralized asset.
BTC, despite its volatility and traceability, offers opportunities for sovereign storage via cold wallets and direct transactions, making it a strong candidate for operating beyond the traditional financial network.
The real danger lies in placing all bets on one asset: depending solely on USDT translates to accepting a critical risk.