In the face of hyperinflation reaching an annual rate of 229%, Venezuelan citizens are increasingly abandoning their national currency, the Bolívar, in favor of the more stable USDt (Tether) stablecoin. The inflation crisis has deteriorated the value of the Bolívar by over 70% in recent months, forcing populations across all social classes to switch to what is locally referred to as “Binance dollars” for ordinary purchases including groceries and salaries.
The cryptocurrency adoption in Venezuela has seen drastic increases. The country ranks 9th worldwide per capita in crypto usage, fueled by a 110% increase in overall crypto activity last year. This demonstrates a significant move towards digital currencies amid severe economic constraints imposed by government policies and international sanctions. Interestingly, transactions under $10,000 majorly involved stablecoins, accounting for 47% of all cryptocurrency transactions in the region in 2024.
With three different prevailing exchange rates—the official Central Bank rate, the parallel market rate, and the USDt rate on Binance—most consumers and businesses prefer the Binance rate for its liquidity and less volatile nature compared to the wildly fluctuating parallel market rates. As the traditional financial system continues to crumble under economic pressure, the role of stablecoins like USDt has expanded beyond simple transactions to include business operations across various industries, effectively navigating sanctions and maintaining economic stability within the country.
