Venezuela, one of the world’s largest oil producers, is increasingly turning to Tether’s USDT stablecoin to settle payments for crude oil shipments. According to local sources, the government is leveraging USDT transactions to bypass restrictions in the international financial system and ensure a steady flow of foreign currency into the domestic market.

This move represents a significant shift in Venezuela’s oil trade strategy. By relying on stablecoins instead of traditional banking channels, the government can avoid payment blockades and inject liquidity directly into the local economy.

Why USDT?

Stablecoins like USDT are pegged to the U.S. dollar, providing price stability compared to volatile cryptocurrencies such as Bitcoin or Ethereum. For countries like Venezuela, which face both economic crises and international sanctions, stablecoins serve as an alternative route for trade settlements.

Economist Asdrubal Oliveros explained in a recent interview that Venezuela has increased its reliance on USDT for crude sales in recent months. He noted that this system has also expanded into corporate treasuries, where businesses now use USDT to manage liquidity and hedge against bolívar devaluation.

Direct Sales to Boost Dollar Liquidity

Under the new framework, the Venezuelan government not only receives oil payments in USDT but also resells the stablecoin to supply companies and service providers. These transactions are settled in local fiat currency, creating a parallel channel for injecting much-needed dollar liquidity into the domestic market.

Oliveros emphasized that the scheme allows the government to stabilize local markets without relying on traditional U.S. dollar transactions. This shift is crucial given the ongoing restrictions Venezuelan institutions face when attempting to use the global banking system.

Role of State Banks

Reports suggest that the USDT transactions are routed through state-owned banks and distributed to a limited number of companies. These businesses, which must be pre-approved, receive payments in designated wallets controlled by government oversight.

However, the lack of official acknowledgment has raised questions about the transparency of the system. Government representatives have not confirmed or denied the use of stablecoins in oil settlements, leaving much of the information reliant on insider accounts and market analysts.

A Pattern of Stablecoin Integration

The use of USDT in Venezuela’s oil operations is not entirely new. In 2024, the country’s state-owned oil company, PDVSA, reportedly required that more than half of crude shipment payments be made in stablecoins. This move was seen as part of a broader strategy to minimize exposure to U.S. sanctions while ensuring trade continuity.

Now, the reliance on USDT appears to be expanding, highlighting its growing importance in Venezuela’s energy export model.

The Risks of Using USDT

While USDT provides immediate benefits, it also comes with significant risks. Tether, the company behind USDT, has historically complied with U.S. government sanctions. This means that if U.S. authorities identify wallets linked to Venezuela’s oil trade, they could freeze assets, leaving both the government and local companies exposed to heavy financial losses.

Analysts warn that the heavy dependence on a centralized stablecoin exposes Venezuela to geopolitical and regulatory vulnerabilities. Unlike decentralized cryptocurrencies, stablecoins operate under the authority of private issuers who must comply with international regulations.

Economic Impact on Local Markets

Despite the risks, the inflow of stablecoins has already begun shaping Venezuela’s domestic economy. According to local economic analysis firm Ecoanalitica, more than $119 million entered the private sector in July 2025 through USDT transactions.

This influx of digital dollars provides companies with greater flexibility, helping them navigate inflation and currency controls. For ordinary Venezuelans, however, the benefits may be limited unless the government expands access beyond selected firms.

Global Implications

Venezuela’s adoption of USDT in oil trade adds to a growing global trend of using stablecoins in cross-border settlements. While nations like Russia, Iran, and parts of Africa are also exploring digital assets for trade, Venezuela stands out due to the scale of its oil exports and the severity of its sanctions.

If successful, this model could encourage other sanctioned states to follow suit, potentially reshaping the role of stablecoins in global trade. However, it could also invite stricter oversight from U.S. regulators and global financial watchdogs.

Conclusion

Venezuela’s pivot to USDT for crude oil settlements marks a historic milestone in the use of stablecoins for international trade. By leveraging USDT, the government aims to bypass sanctions, stabilize local markets, and sustain crude sales revenue.

Yet, the strategy carries inherent risks tied to Tether’s compliance obligations and geopolitical pressures. The outcome of this experiment will not only shape Venezuela’s economic trajectory but also influence the broader debate on stablecoins as tools for sanctioned economies.

As stablecoins become more integrated into global markets, Venezuela’s bold move underscores both their transformative potential and the complex risks that come with challenging traditional financial systems.