Key insights:
With inflation soaring at 229%, daily costs in Venezuela are often determined in USDT “Binance dollars,” typically using current P2P rates.
There are three dollar rates (official, parallel, and P2P), but vendors primarily use the P2P rate.
The government permits dollar-denominated cryptocurrencies in exchanges, even though it hasn’t formalized dollarization.
Venezuela is a key player in the global crypto scene: Stablecoins are predominant for smaller transactions, mainly through TRC-20 USDT.
In Caracas, receipts frequently display totals in “Binance dollars,” as pricing has transitioned from the Venezuelan bolívar to the blockchain.
As of May 2025, with annual inflation around 229%, daily prices refer to three sources: the exchange rate from the Venezuelan central bank (BCV), the parallel “dólar negro,” and a peer-to-peer (P2P) Tether USDt (USDT) rate that many merchants utilize.
Discrepancies between these rates persist due to capital controls, limited or distinct liquidity pools, and sporadic interventions.
To address constant price updates in bolívars, merchants now quote, settle, or reconcile in USDT. This essentially represents dollarization utilizing stablecoins instead of cash.
What are “Binance dollars?”
In local terms, “dólares Binance” refers to USDT priced and settled within P2P markets (most notably, Binance P2P).
For shops, freelancers, and property managers, the P2P rate serves both as the day’s reference price and the payment mechanism.
While other applications and over-the-counter (OTC) desks exist, robust USDT liquidity keeps this standard prevailing.
Transfers usually occur on Tron (TRC-20): fees remain low, wallets are widely accessible, and digital dollars are simpler to obtain and circulate than limited physical USD (especially for small, frequent payments).
How USDT “supplanted” cash in Venezuela
Three main factors led to the migration of Venezuela’s dollars onto the blockchain.
Initially, inflation reaccelerated in May 2025 to around 26% month-on-month, maintaining an annual rate exceeding 200%. Pricing in bolívars became unsustainable; menus and invoices would require continual adjustments.
Secondly, the bolívar’s decline increased the disparity between official and street prices. The currency lost approximately 30% in the recent months and about 69% year-on-year (from July 2024 to July 2025), prompting merchants to seek a more stable unit of account.
Lastly, physical US dollars are limited, a consequence of sanctions and diminishing oil revenues. Digital dollars (primarily USDT) have proven easier to acquire, store, and circulate through low-fee networks and widespread wallets.
Policy also leaned toward the same trend. Although quoting the parallel rate is still penalized, authorities have gradually permitted dollar-pegged crypto in private-sector exchanges to keep the markets operational, suggesting an implicit tolerance short of formal dollarization.
Adoption metrics enhance this narrative. Venezuela ranks among the top in grassroots crypto usage, with stablecoins capturing an ever-increasing share of daily transactions.
In 2024, on-chain activity approximately doubled year-over-year, with stablecoins constituting about 47% of transactions under $10,000, indicating that USDT now serves as the anchor for pricing and settlements for households and small and medium enterprises (SMEs).
Did you know? Since 2008, Venezuela has removed 14 zeros from its currency over three redenominations (2008, 2018, 2021).
How a USDT transaction operates in Venezuela
At the checkout, prices are displayed in USD but settled in USDT at the current local P2P rate, most often the Binance P2P rate that Venezuelans monitor on their devices.
The cashier (or condo treasurer) refreshes that rate and reveals the total, while you scan a QR code that encodes the merchant’s Tron (TRC-20) address. Confirmation arrives within seconds; typical network fees are low, although you need a small TRX (TRX) balance to cover costs.
Merchants then decide: hold USDT as operating capital, exchange part of it for bolívars via an OTC/P2P desk for wages and bills, or pass USDT upstream to suppliers.
In reality, the P2P rate serves as the operational standard since it reflects active order books and can be executed right away. Consequently, apartment buildings, small stores, and freelancers reconcile based on it rather than the central bank’s rate or informal quotes.
This process (USD listing, P2P conversion, TRC-20 transfer) now facilitates everyday transactions in the nation.
Who utilizes it and for what?
Households leverage USDT for groceries, condo fees, rent adjustments, and peer-to-peer reimbursements to mitigate price volatility in VES (Venezuelan bolívar).
Small and medium enterprises procure imports priced in dollars, maintain financial records in USD for clarity, and selectively convert to VES for payroll, utilities, and taxes.
Employers in retail and services sometimes compensate bonuses or part of salaries in USDT to retain employees and preserve purchasing power, while larger entities connected to public contracts continue to align formal accounting with the BCV reference even if daily operations lean on P2P pricing.
For many participants, the practicality is compelling: With a smartphone and a basic wallet, they can hold, receive, and send digital dollars without searching for scarce cash.
Did you know? Venezuela’s diaspora totals 7.7 million-7.9 million individuals (one of the largest displacements globally), significantly boosting crypto remittances back home.
Challenges, risks, and mitigation strategies
The transition brings its own set of challenges.
Rate risk and reconciliation: Rates linked to real-time P2P books can fluctuate intraday; even a short delay can result in a payment falling short or exceeding if VES varies. Common strategies include timestamped invoices, short payment durations, “Pay Now” buttons that refresh rates, and immediate settlement/reconciliation by day’s end.
Custody and device security: Risks from phone theft and loss of seed phrases are genuine operational threats. Users employ PIN/biometric protection, wallet passcode timeout, offline recovery phrase backups, and (above a certain threshold) transfer balances to hardware devices or account-abstraction wallets with social recovery.
Platform reliance and blacklisting: USDT is centrally issued and can be frozen under specific circumstances. To mitigate exposure, merchants keep operating balances low, distribute funds across several wallets, avoid dubious approvals, and maintain simple off-ramps.
OTC/P2P fraud: Off-platform transactions and fraudulent payment screenshots still occur. Standard practice includes utilizing on-platform escrow, trading solely with reputable counterparts, waiting for on-chain confirmations, and requiring verifiable proof-of-payment before delivering goods.
Policy gray area: Authorities have penalized quoting the parallel rate while gradually permitting USDT in private-sector exchanges. Operators safeguard themselves by refraining from explicit parallel-rate mentions on invoices, maintaining clear records, separating pricing from accounting currency where necessary, and closely monitoring regulatory changes.
Did you know? In August 2024, access to Binance was unpredictably restricted by state-owned CANTV amid post-election turmoil, emphasizing platform-dependence risks for P2P users.
Digital dollars solidify their presence
Venezuela is undergoing a form of dollarization facilitated by crypto.
Unlike the 2019-2022 period, where cash dollars informally dominated commercial transactions, today the unit of account and much of the settlement liquidity derives from stablecoins (primarily USDT) without any shift in legal tender laws.
The rationale is regional: In high-inflation nations like Argentina, stablecoins anchor daily transactions, remittances, and working capital due to their provision of dollar pricing with seamless transfers through widely used wallets and P2P markets.
Policymakers are making slight adjustments; Venezuela now permits dollar-linked crypto in private-sector currency exchanges to maintain commerce, yet this remains a pragmatic workaround rather than a formal dollarization mandate.
More broadly, dollar-backed stablecoins extend the dollar’s influence into everyday payments and small transactions, which explains why, when local currency is unstable and cash in short supply, digital dollars serve as the easiest solution for households and SMEs.
This article does not provide investment advice or recommendations. Every investment and trading decision carries risks, and readers should conduct their own research before acting.
