In brief
- TRM says U.S. sanctions are driving everyday use of crypto, particularly USDT, in Venezuela.
- Growing dependence on informal peer-to-peer crypto markets heightens sanctions-evasion risks, TRM says.
- Rising U.S.–Venezuela tensions could intensify scrutiny of the country’s crypto activity.
New research suggests Venezuela has become increasingly dependent on crypto as the United States and its allies escalate a push for regime change in the isolated nation.
Nearly a decade of economic isolation, aggressive international sanctions, and economic collapse have made crypto tokens—particulary, Tether’s USDT stablecoin—central to the everyday life of Venezuelans, according to a new report from TRM Labs.
The report also underscores how Venezuela’s largely unregulated crypto economy has potentially aided, or could aid, the nation in circumventing international sanctions.
“You can absolutely say that years of sanctions and loss of correspondent banking helped push both the state and the broader economy toward alternative rails,” Ari Redbord, a former U.S. Treasury official and TRM’s global head of policy, told Decrypt.
Redbord characterized the impact of digital assets on the Venezuelan economy as something of a double-edged sword. He said that crypto’s humanitarian impact on a population lacking stable financial alternatives should be supported—but that the United States should also figure out how to constrain crypto’s value in Venezuela “as a tool for sanctions evasion.”
TRM’s report underscored the popularity in Venezuela of informal peer-to-peer crypto trading platforms, which have minimal KYC measures and generally operate outside the banking system.
The blockchain intelligence firm found that a single website offering peer-to-peer crypto trading was recently responsible for 38% of all web traffic coming from Venezuelan IP addresses.
Informal peer-to-peer crypto trading, when paired with other variables like hybrid platforms situated between domestic banking and offshore liquidity—plus high-velocity, cross-border stablecoin flows routed through multiple blockchains—can often prove to be a recipe ripe for sanctions evasion, Redbord said.
Venezuela does have a dedicated crypto regulator, SUNACRIP. But the agency has suffered corruption scandals and restructuring efforts that have weakened its control over the nation’s digital assets economy, TRM said.
The country was also an early adopter of blockchain technology. In 2018, Venezuela issued the Petro, a crypto token backed by the country’s oil and mineral reserves intended to be a sturdier national currency than the plummeting bolivar. But after years of controversy, which put the Petro at the center of tensions between Venezuelan president Nicolás Maduro and his political opposition, the token was discontinued in 2024.
In recent months, the White House has dramatically escalated a growing standoff with Venezuela, with President Donald Trump refusing this week to rule out the possibility of sending American troops into the country to overthrow the Maduro government.
On Wednesday, the U.S. government seized a sanctioned oil tanker off the coast of Venezuela, in a “serious escalation” of tensions between both countries.
Daily Debrief Newsletter
Start every day with the top news stories right now, plus original features, a podcast, videos and more.
