In Venezuela, the stablecoin USDT (Tether) has effectively replaced the national currency, the bolívar, becoming the country’s main unit of account. Locals have even nicknamed it the “Binance Dollar,” reflecting its widespread use in everyday transactions.
The shift comes amid soaring hyperinflation of 229%, which has rendered traditional price-setting in bolívars increasingly impractical. As a result, merchants now often peg their prices to USDT rates from Binance P2P platforms, making the stablecoin the default medium of exchange.
How “Binance Dollars” Work
The term “Binance Dollars” refers to USDT priced via P2P exchanges, primarily Binance. This rate has become the informal standard for commerce, used by stores, property managers, and freelancers alike. Most transactions are conducted on the TRON network (TRC-20), which provides low fees and rapid confirmations, making digital dollars more convenient than scarce physical cash.
Payment is simple: sellers update their P2P rate, buyers scan a QR code with the TRC-20 wallet address, and payment confirmation occurs within seconds.
Why Venezuela Turned to Stablecoins
Three main factors have driven this crypto-dollarization:
- Hyperinflation: Rapid price increases have made the bolívar nearly unusable for pricing goods.
- Cash shortages: Sanctions and currency restrictions have limited access to physical dollars.
- Regulatory tolerance: Though not officially legalized, the government tolerates USDT payments, recognizing their role in sustaining economic activity.
Households now pay for groceries, utilities, rent, and small purchases in USDT, while businesses use stablecoins for supplier payments, procurement, and even salaries to maintain purchasing power.
Usage and Security Measures
Despite its adoption, risks remain, including price volatility, P2P fraud, phone thefts, and platform restrictions. Venezuelans mitigate these risks by:
- Using Binance escrow services
- Checking counterparties’ ratings
- Storing large sums in cold wallets
- Updating rates in real time before payments
Analysts report that by 2024, stablecoins accounted for 47% of transfers under $10,000, and overall on-chain activity in the country doubled.
Even state-owned PDVSA has started paying in USDT to circumvent sanctions, and opposition figures have called Bitcoin a “lifeline” for the country. While crypto mining was restricted in 2024 to protect the power grid, stablecoins have become a de facto part of Venezuela’s financial system.
