Key takeaways:
In Venezuela, daily prices are set in USDT, also known as “Binance dollars,” reflecting live P2P rates amid an inflation rate of 229%.
Three distinct dollar rates exist—official, parallel, and P2P—though merchants typically adhere to the P2P rate.
While the government allows dollar-backed crypto in exchanges, dollarization itself remains unlegalized.
Venezuela has emerged as a global crypto hotspot, with stablecoins largely dominating small transactions, primarily through TRC-20 USDT.
In Caracas, receipts frequently display totals in “Binance dollars” as pricing shifts from the Venezuelan bolívar to blockchain-based transactions.
As of May 2025, with annual inflation around 229%, everyday pricing now relies on three reference points: the central bank of Venezuela’s (BCV) exchange rate, the parallel “dólar negro,” and the Tether USDt (USDT) peer-to-peer (P2P) rate most merchants utilize.
Disparities among these rates persist due to capital controls, separate liquidity pools, and periodic interventions.
To mitigate constant repricing in bolívars, merchants prefer quoting, settling, or reconciling in USDT—effectively dollarization based on stablecoins instead of cash.
What are “Binance dollars?”
In local terminology, “dólares Binance” refers to USDT transacted and settled on P2P markets, notably Binance P2P.
This P2P quote serves as the day’s reference price and payment framework for shops, freelancers, and building administrators.
Other applications and over-the-counter (OTC) desks exist, but deep USDT liquidity keeps this benchmark at the forefront.
Transfers predominantly occur on Tron (TRC-20), with minimal fees, widespread wallets, and easier access to digital dollars compared to scarce paper USD, especially for frequent small payments.
How USDT “replaced” cash in Venezuela
Three factors propelled the shift of Venezuela’s dollars onto the blockchain.
First, inflation surged again in May 2025, reaching approximately 26% month-over-month, making bolívar pricing impractical; menus and invoices required constant modifications.
Second, the bolívar’s decline expanded the gap between official and street prices, with the currency losing about 30% recently and approximately 69% year-over-year (July 2024 to July 2025), prompting merchants to seek a more stable unit of account.
Third, physical US dollars are limited due to sanctions and constrained oil revenues. Digital dollars, particularly USDT, offered easier sourcing, storage, and circulation through low-fee networks and accessible wallets.
Policy also played a role. Although quoting the parallel rate incurs penalties, authorities have incrementally allowed dollar-pegged crypto in private sector exchanges to facilitate market function, representing an implicit tolerance rather than formal dollarization.
Adoption trends further illustrate the situation. Venezuela ranks among the top countries in grassroots crypto use, with stablecoins occupying an increasing share of daily transfers.
In 2024, on-chain activity approximately doubled year-over-year, with stablecoins representing about 47% of transactions under $10,000, indicating that USDT now underpins pricing and settlement for households as well as small and medium-sized enterprises (SMEs).
Did you know? Since 2008, Venezuela has eliminated 14 zeros from its currency through three redenominations (2008, 2018, 2021).
How a USDT payment actually works in Venezuela
At the point of sale, prices are listed in USD but settled in USDT based on the day’s local P2P quote, typically the Binance P2P rate tracked on phones.
The cashier (or condo treasurer) refreshes this quote, displays the total amount, and you scan a QR code linked to the merchant’s Tron (TRC-20) address for payment. Confirmation happens within seconds; typical network fees are low, though a small TRX (TRX) balance is needed to cover fees.
Merchants then decide to either hold USDT as working capital, swap part of it to bolívars through an OTC/P2P desk for wages and utilities, or transfer USDT upstream to suppliers.
In practice, the P2P rate acts as the operational benchmark due to its representation of liquid order books and immediate execution capabilities. Consequently, apartment buildings, small shops, and freelancers reconcile against it rather than relying on the central bank’s rate or informal quotes.
This workflow (USD pricing, P2P conversion, TRC-20 transfer) now facilitates everyday transactions in the country.
Who uses it and for what
Households utilize USDT for groceries, condo dues, rent adjustments, and peer-to-peer reimbursements, avoiding price volatility in VES (Venezuelan bolívar).
SMBs restock imports priced in dollars, maintain management records in USD for clarity, and selectively convert to VES for payroll, utilities, and taxes.
Retail and services employers sometimes issue bonuses or part of salaries in USDT to retain employees and safeguard purchasing power. Meanwhile, larger entities involved in public procurement align formal accounting with the BCV reference, even as daily operations depend on P2P pricing.
For many participants, the practical attraction lies in the ability to hold, receive, and send digital dollars using just a phone and a basic wallet, without the need for limited cash.
Did you know? Venezuela’s diaspora amounts to 7.7 million-7.9 million people, one of the world’s largest displacements, boosting crypto remittances to the country.
Frictions, risks, and how people mitigate them
However, this transition is not without its challenges.
Rate risk and reconciliation: Live P2P quotes can fluctuate throughout the day; even a short delay can result in payments being either short or excessive if VES shifts. Common strategies include timestamped invoices, short payment windows, “Pay Now” buttons that refresh quotes, and immediate settlement/reconciliation at day’s end.
Custody and device security: Risks such as phone theft and seed phrase loss are prevalent. To mitigate, users employ PIN/biometric locks, wallet passcode timeouts, offline backups of recovery phrases, and, for higher balances, transfer funds to hardware devices or account-abstraction wallets with social recovery features.
Platform dependence and blacklisting: Since USDT is centrally issued, it can be frozen under certain conditions. To mitigate exposure, merchants keep operating balances small, diversify funds across multiple wallets, avoid risky approvals, and maintain straightforward off-ramps.
OTC/P2P fraud: Instances of off-platform deals and fake payment screenshots persist. Standard practice entails using on-platform escrow, trading only with high-reputation counterparts, waiting for on-chain confirmation, and requiring verifiable proof-of-payment prior to releasing goods.
Policy gray zone: Authorities have penalized quoting the parallel rate while gradually allowing USDT in private exchanges. Operators safeguard themselves by avoiding explicit references to the parallel rate on invoices, maintaining organized records, separating pricing from accounting currency as necessary, and diligently monitoring policy changes.
Did you know? In August 2024, access to Binance was intermittently blocked by CANTV, a state-owned ISP, during post-election unrest, highlighting the risks associated with platform dependence for P2P users.
Digital dollars take hold
Venezuela is undergoing de facto dollarization facilitated by crypto.
In contrast to the 2019-2022 period, when cash dollars dominated shop counters, today the primary unit of account and a significant portion of settlement liquidity arise from stablecoins (primarily USDT), without altering legal-tender laws.
The reasoning is regional: In high-inflation environments like Argentina, stablecoins support everyday transactions, remittances, and working capital by providing dollar pricing and seamless transfers through widely-used wallets and P2P platforms.
Policymakers are making gradual adjustments; Venezuela now permits dollar-linked crypto in private sector exchanges to ensure commercial activity continues, yet this remains a practical workaround rather than an official dollarization measure.
In a broader context, dollar-backed stablecoins enhance the dollar’s influence in daily payments and small-value transactions, demonstrating that when local currency is unstable and cash is rare, digital dollars represent the most viable option for households and SMEs.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
