Venezuela's reliance on 'stablecoins' surges amid U.S. pressure

Uk Jin

Summary

It reported that the use of stablecoins in Venezuela is surging.
It said that people have adopted dollar-pegged stablecoins such as Tether (USDT) for asset protection and everyday payments.
It reported that an unstable economy and tough U.S. measures are cited as reasons for increased reliance on stablecoins.

In Venezuela, a primary target after President Donald Trump declared a war on drugs, the use of stablecoins (virtual assets pegged to fiat currencies) appears to be surging. Analysts say that with hyperinflation compounded by the threat of war, reliance on stablecoins has increased further.

On the 28th (Korea time), the cryptocurrency-focused outlet Cointelegraph reported that Venezuelans have begun using dollar-pegged stablecoins such as Tether (USDT) to protect their assets. Venezuelans are said to call stablecoins 'Binance Dollar' and have adopted them as everyday payment methods.

Reasons Venezuelans are adopting dollar-pegged stablecoins include an unstable economy and threats of war with the United States.

In fact, Venezuela has experienced the deepest economic contraction in over a decade, excluding countries at war. In 2018, it even experienced hyperinflation with prices rising 130% over a year.

Moreover, the situation worsened after President Trump raised concerns about drug smuggling by Venezuelan cartels. The Trump administration has continued tough measures, including blocking foreign-currency inflows to Nicolás Maduro's regime and deploying an aircraft carrier to the Caribbean Sea near Venezuela.

USDT