Key takeaways:
With inflation at 229%, daily prices in Venezuela are typically set in USDT “Binance dollars,” often reflecting live P2P rates.
Three dollar rates exist (official, parallel, and P2P), but merchants primarily adhere to the P2P quote.
The government permits dollar-backed crypto on exchanges, although it hasn’t legalized dollarization.
Venezuela has become a global crypto hotspot: Stablecoins dominate small transfers, primarily through TRC-20 USDT.
In Caracas, receipts increasingly display totals in “Binance dollars,” as pricing has transitioned from the Venezuelan bolívar to the blockchain.
With annual inflation around 229% as of May 2025, everyday pricing aligns with three references: the central bank of Venezuela’s (BCV) exchange rate, the parallel “dólar negro,” and a Tether USDt (USDT) peer-to-peer (P2P) rate commonly used by merchants.
Discrepancies persist due to capital controls, separate liquidity pools, and occasional interventions.
To avoid continual repricing in bolívars, merchants now quote, settle, or reconcile in USDT. Essentially, this results in a form of dollarization based on stablecoins rather than cash.
What are “Binance dollars?”
In local terms, “dólares Binance” refers to USDT priced and settled on P2P markets (most notably, Binance P2P).
For shops, freelancers, and building administrators, the P2P quote serves as both the day’s reference price and the payment infrastructure.
While other apps and over-the-counter (OTC) desks are available, deep USDT liquidity keeps this benchmark prevailing.
Transfers typically occur on Tron (TRC-20): fees are minimal, wallets are ubiquitous, and digital dollars are easier to obtain and distribute than rare paper USD (especially for small, frequent payments).
How USDT “replaced” cash in Venezuela
Three factors propelled Venezuela’s dollars onto the blockchain.
Initially, inflation surged in May 2025 to about 26% month-on-month, sustaining the annual rate above 200%. Pricing in bolívars became impractical; menus and invoices required continuous updates.
Secondly, the bolívar’s decline widened the gap between official and street pricing. The currency lost around 30% in recent months and approximately 69% year-over-year (from July 2024 to July 2025), prompting merchants to seek a more stable unit of account.
Third, physical US dollars are scarce, a consequence of sanctions and limited oil cash flows. Digital dollars (especially USDT) became easier to source, store, and circulate through low-fee networks and common wallets.
Policies also nudged circumstances. Though quoting the parallel rate is still penalized, officials have gradually permitted dollar-pegged crypto in private-sector exchanges to maintain market functionality, reflecting an implicit tolerance short of formal dollarization.
Adoption metrics further illustrate the trend. Venezuela ranks high in grassroots crypto utilization, with stablecoins taking an increasing share of everyday transfers.
In 2024, onchain activity approximately doubled year-over-year, with stablecoins composing around 47% of sub-$10,000 transactions, indicating that USDT now serves as the foundation for pricing and settlement for households and small to medium-sized enterprises (SMEs).
Did you know? Since 2008, Venezuela has removed 14 zeros from its currency through three redenominations (2008, 2018, 2021).
How a USDT payment actually works in Venezuela
At the register, prices appear in USD but are settled in USDT at the day’s local P2P quote, typically the Binance P2P rate that Venezuelans monitor on their devices.
The cashier (or condominium treasurer) updates that quote and displays the total, allowing you to scan a QR code encoding the merchant’s Tron (TRC-20) address. Confirmation occurs within seconds; typical network fees are low, though a small TRX (TRX) balance is necessary to cover costs.
Merchants then decide: whether to hold USDT as working capital, swap part of it for bolívars through an OTC/P2P desk for salaries and utilities, or transfer USDT upstream to suppliers.
In practice, the P2P rate serves as the operational benchmark because it reflects liquid order books and facilitates immediate execution. Consequently, apartment complexes, small shops, and freelancers reconcile against it instead of the central bank’s rate or informal quotes.
This process (USD listing, P2P conversion, TRC-20 transfer) now facilitates daily payments throughout the country.
Who uses it and for what
Households utilize USDT for groceries, condominium fees, rent top-ups, and peer-to-peer reimbursements to avoid price fluctuations in VES (Venezuelan bolívar).
Small and medium-sized businesses restock imports priced in dollars, maintain management accounts in USD for clarity, and selectively convert to VES for payroll, utilities, and taxes.
Employers in retail and services may pay bonuses or a portion of salaries in USDT to retain staff and sustain purchasing power, while larger entities closely tied to public procurement continue to align formal accounting with the BCV reference, even if everyday operations rely more on P2P pricing.
For many participants, the advantage is practical: With a phone and a basic wallet, they can hold, receive, and send digital dollars without the difficulty of locating scarce cash.
Did you know? Venezuela’s diaspora tops 7.7 million-7.9 million individuals (among the largest global displacements), driving significant crypto remittances home.
Frictions, risks and how people mitigate them
The transformation is not without challenges.
Rate risk and reconciliation: Quotes related to live P2P books can fluctuate throughout the day; even a delay of an hour can lead to payments being short or excessive if VES varies. Common mitigation strategies include timestamped invoices, short payment windows, “Pay Now” buttons that refresh the quote, and immediate settlement/reconciliation at the day’s end.
Custody and device security: Risks of phone theft and loss of seed phrases are genuine operational concerns. Users mitigate these risks with PIN/biometric locks, timed wallet passcodes, offline backups of recovery phrases, and for larger balances, transferring funds to hardware wallets or account-abstraction wallets with social recovery.
Platform dependence and blacklisting: USDT is centrally issued and may be frozen under certain circumstances. To reduce exposure, merchants keep operational balances low, diversify funds across multiple wallets, avoid risky approvals, and maintain straightforward off-ramps.
OTC/P2P fraud: Off-platform transactions and counterfeit payment screenshots remain possible. Best practices include using on-platform escrow, trading only with reputable counterparties, awaiting onchain confirmation, and requiring authentic proof-of-payment prior to releasing goods.
Policy gray zone: Authorities have penalized quoting the parallel rate while gradually allowing USDT in private-sector exchanges. Operators protect themselves by steering clear of explicit parallel-rate references on invoices, maintaining clear records, separating pricing from accounting currencies where necessary, and closely monitoring regulatory changes.
Did you know? In August 2024, access to Binance was sporadically blocked by state-owned ISP CANTV due to post-election unrest, highlighting risks for P2P users reliant on platforms.
Digital dollars take hold
Venezuela is witnessing de facto dollarization via crypto.
Unlike the 2019-2022 period, when cash dollars predominantly filled shop counters, today, the unit of account and much of the liquidity supporting settlements are derived from stablecoins (mainly USDT) without any alterations to legal-tender laws.
The underlying logic is regional: In high-inflation nations like Argentina, stablecoins function as anchors for everyday transactions, remittances, and working capital, offering dollar pricing with frictionless transfers across widely utilized wallets and P2P markets.
Policymakers are making minor adjustments; Venezuela is now permitting dollar-linked crypto in private-sector currency exchanges to sustain commerce, but this remains a pragmatic solution rather than a formal dollarization policy.
On a broader scale, dollar-backed stablecoins are extending the dollar’s influence into everyday payments and small transactions, which is why digital dollars become the most accessible option for households and SMEs when local currency is unstable and cash is limited.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research before making any decisions.
