Key takeaways:
With inflation reaching 229%, pricing in Venezuela is often set in USDT “Binance dollars,” primarily followinglive P2P rates.
There are three existing dollar rates (official, parallel, and P2P), but merchants typically adhere to the P2P rate.
The government permits dollar-backed cryptocurrencies on exchanges, though it has not legalized dollarization.
Venezuela is recognized as a global crypto hub: Stablecoins, predominantly TRC-20 USDT, are used for small transactions.
In Caracas, receipts frequently display totals in “Binance dollars” due to the shift away from the Venezuelan bolívar towards blockchain pricing.
With an annual inflation rate around 229% as of May 2025, daily prices align with three references: the Venezuelan central bank’s (BCV) exchange rate, the parallel “dólar negro,” and the Tether USDt (USDT) peer-to-peer (P2P) rate used by many merchants.
Discrepancies persist due to capital controls, limited or distinct liquidity pools, and intermittent government interventions.
To circumvent continuous repricing in bolívars, merchants now operate, settle, or reconcile in USDT, effectively realizing dollarization via stablecoins rather than cash.
What are “Binance dollars?”
In local terms, “dólares Binance” refers to USDT priced and settled in P2P markets (notably, Binance P2P).
For retailers, freelancers, and building managers, this P2P rate serves as both the day’s reference price and the payment system.
While other apps and OTC desks are available, robust USDT liquidity keeps this benchmark prevailing.
Transfers typically use Tron (TRC-20): fees are low, wallets are widely available, and digital dollars are simpler to obtain and circulate than limited paper USD (particularly for small, frequent payments).
How USDT “replaced” cash in Venezuela
Three key factors propelled Venezuela’s dollars onto the blockchain.
Initially, inflation surged in May 2025 to around 26% month-on-month, keeping the annual rate above 200%. Pricing in bolívars became unfeasible, requiring frequent adjustments to menus and invoices.
Secondly, the bolívar’s depreciation enlarged the gap between official and street prices. The currency depreciated about 30% recently and around 69% year-over-year (July 2024 to July 2025), leading merchants to seek a more stable unit of account.
Lastly, physical US dollars are hard to come by due to sanctions and limited oil revenue. Digital dollars, particularly USDT, became easier to obtain, store, and circulate through low-fee networks and prevalent wallets.
Policy also leaned toward this outcome. While quoting the parallel rate is still discouraged, authorities have slowly permitted dollar-pegged crypto in private exchanges to maintain market functionality, reflecting a tolerance without formal dollarization.
Adoption metrics further illustrate this trend. Venezuela ranks among the top in grassroots crypto utilization, with stablecoins capturing a broader share of daily transactions.
In 2024, on-chain activity approximately doubled year-on-year, and stablecoins constituted around 47% of transactions under $10,000, indicating that USDT now supports pricing and reconciliation for households and SMEs.
Did you know? Since 2008, Venezuela has removed 14 zeros from its currency across 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 rate, often the Binance P2P rate that Venezuelans monitor on their devices.
The cashier (or condo manager) refreshes the rate and displays the total, and you scan a QR code that contains the merchant’s Tron (TRC-20) address. Confirmation is received within seconds; typical network fees are minimal, although a small TRX (TRX) balance is required to cover costs.
Merchants then decide whether to hold USDT as working capital, convert portions to bolívars through an OTC/P2P desk for payroll and utilities, or transfer USDT to suppliers.
In practice, the P2P rate serves as the operational standard since it reflects active order books and facilitates immediate execution. Thus, residential buildings, small businesses, and freelancers reconcile against it instead of the central bank’s rate or informal rates.
This method (USD listing, P2P conversion, TRC-20 transfer) now enables daily transactions within the country.
Who uses it and for what
Households utilize USDT for groceries, condo fees, rent adjustments, and peer-to-peer payments to mitigate price fluctuations in VES (Venezuelan bolívar).
Small and medium-sized enterprises procure imports priced in dollars, maintain their accounts in USD for transparency, and selectively convert to VES for salaries, utilities, and taxes.
Retail and service employers sometimes provide bonuses or partial salaries in USDT to retain employees and safeguard purchasing power, while larger organizations linked to public procurement tend to align formal accounting with the BCV reference, even if everyday practices are grounded in P2P pricing.
For many, the practicality is compelling: A phone and simple wallet allow them to manage, receive, and transfer digital dollars without the need to search for rare cash.
Did you know? Venezuela’s diaspora numbers 7.7 million-7.9 million individuals (among the largest global displacements), fueling crypto remittances back home.
Frictions, risks and how people mitigate them
However, this transition is not without its complications.
Rate risk and reconciliation: Live P2P quotes can vary throughout the day; even a minor delay can result in payments being under or over the required amount if VES fluctuates. Common strategies to manage this include timestamps on invoices, limited payment periods, “Pay Now” features that refresh quotes, and end-of-day settlement.
Custody and device security: Risks such as theft and seed-phrase loss are significant concerns. Users generally safeguard their assets with PIN/biometric locks, wallet passcode timeouts, offline recovery backups, and transferring larger sums to hardware wallets or accounts with social recovery.
Platform dependence and blacklisting: USDT is centrally managed and can be frozen under specific conditions. To mitigate this risk, merchants maintain modest operational balances, diversify funds across multiple wallets, avoid high-risk approvals, and use straightforward off-ramps.
OTC/P2P fraud: Deals conducted off-platform and falsified payment screenshots can occur. Best practices involve using on-platform escrow, trading exclusively with reputable counterparts, awaiting on-chain confirmations, and demanding valid proof-of-payment before goods are released.
Policy gray zone: Authorities have sanctioned quoting the parallel rate while gradually permitting USDT on private exchanges. Operators protect themselves by avoiding explicit references to parallel rates on invoices, maintaining accurate records, separating pricing from accounting currency where necessary, and closely tracking regulatory changes.
Did you know? In August 2024, access to Binance was periodically restricted by state-owned ISP CANTV amid post-election turmoil, highlighting platform-dependence issues for P2P users.
Digital dollars take hold
Venezuela is witnessing de facto dollarization facilitated by crypto.
Unlike the 2019-2022 period, when physical dollars informally prevailed at retail points, the current unit of account and much of the settlement liquidity now derive from stablecoins (mainly USDT) without any alteration to legal-tender regulations.
The rationale is regional: In high-inflation nations like Argentina, stablecoins facilitate daily transactions, remittances, and working capital by offering dollar pricing with seamless transfers across widely-used wallets and P2P markets.
Policymakers are making incremental adjustments; Venezuela now allows dollar-linked cryptocurrencies in private currency exchanges to sustain commerce, but this remains a practical workaround rather than an official dollarization policy.
Overall, dollar-backed stablecoins are enhancing the dollar’s influence over daily payments and low-value transfers, explaining why, amidst currency instability and cash shortages, digital dollars emerge as the most convenient option for households and SMEs.
This article does not constitute investment advice or recommendations. Every investment and trading decision entails risks, and readers should perform their own research prior to making choices.
