The use of cryptocurrencies in Venezuela has increasingly become entrenched in daily trade, raising new concerns about compliance and humanitarian livelihoods, especially with rising U.S. pressure on Caracas.
1. TRM Labs report on Venezuela's increasing reliance on digital assets
After nearly a decade of economic isolation and strict international sanctions, Venezuela is increasingly relying on cryptocurrencies to sustain its economic activity, according to a new report from TRM Labs.
* The pivotal role of stablecoins: The report highlights that stablecoins, particularly Tether’s USDT, now play a central role in the daily transactions of ordinary Venezuelan citizens.
* A solution to face the crisis: Cryptocurrencies have become a crucial solution for populations facing the collapse of the local banking system and the devaluation of the local currency (the bolívar).
* Risks of sanction evasion: TRM emphasizes that these same mechanisms can carry significant risks of sanction evasion for the state and private actors.
Ari Redbord, global policy head at TRM and former U.S. Treasury official, stated that years of sanctions and loss of banking correspondence "have certainly contributed to pushing both the state and the broader economy toward alternative channels (cryptocurrencies)."
2. A double-edged sword for the Venezuelan economy
Redbord described the impact of digital assets on the Venezuelan economy as fundamentally paradoxical:
* The positive (humanitarian) side: Cryptocurrencies have opened access to cross-border payment and savings tools for people isolated from traditional finance.
* The downside (risks): These currencies have also provided authorities and elites with new ways to transfer value outside the official system.
The report indicates that stablecoins like USDT are often viewed as more reliable than local currency balances, serving as an actual hedge against hyperinflation, wage erosion, and daily banking restrictions.
3. The rise of informal peer-to-peer (P2P) cryptocurrency markets
The TRM report highlights the rapid expansion of informal cryptocurrency markets in the country, driven by platforms enabling direct trading between users.
* Characteristics of informal markets: These services typically lack minimum "know your customer" (KYC) procedures and operate largely outside the local banking system, making them attractive but difficult to supervise.
* Significant reliance: A blockchain intelligence firm found that a single site focused on peer-to-peer trading recently accounted for 38% of total web traffic coming from Venezuelan IP addresses.
* Complexity of tracking: Informal trading, coupled with hybrid intermediaries between local banks and offshore venues, creates complex transaction chains that are difficult for authorities to trace to reveal patterns associated with sanction evasion.
4. Banking restrictions and the impact of "Operation Choke Point"
The report indicates that the approach taken by American banks to restrict or deny services to clients based on legal categories (such as cryptocurrencies) rather than specific financial risk indicators raises concerns about "Operation Choke Point" that occurred in 2013.
In the Venezuelan context, this banking squeeze deepens individual-led trading channels and the use of stablecoins, complicating global due diligence as more value migrates to platforms outside direct regulatory oversight.
5. Fragility of oversight and "SUNACRIP" restrictions
Venezuela has an official regulatory body for cryptocurrencies, SUNACRIP, but TRM indicates that it has faced repeated corruption scandals and restructuring, undermining its effectiveness and credibility.
* A fragmented regulatory framework: SUNACRIP's challenges have left a fragmented regulatory framework, where enforcement is inconsistent, and market participants often operate in a gray legal area.
* Feeding parallel markets: TRM's analysis suggests that institutional instability has bolstered parallel and less transparent markets, increasing the risk that actors or private networks may use cryptocurrencies to circumvent existing sanction controls.
6. Early blockchain experiments and the demise of the "Petro"
Venezuela was one of the first countries to experiment with state-backed cryptocurrencies. In 2018, the government launched the "Petro", a currency that was claimed to be backed by national oil and mineral reserves, but it was controversial both domestically and internationally.
After years of strife and limited adoption, the Petro was officially suspended in 2024, according to TRM. However, this experiment entrenched digital assets in Venezuelan political thought and encouraged citizens to explore other cryptocurrencies and stablecoins.
7. Escalating tensions between the United States and Venezuela and dynamics of sanctions
Recent geopolitical developments have heightened the urgent need for TRM warnings. The White House has recently escalated its stance against Caracas, including new enforcement actions related to the oil sector and maritime trade.
Against this backdrop, the TRM Labs report argues that expanding oversight of digital asset networks connected to Venezuela is likely to become a priority for U.S. regulators. However, pressure campaigns must take into account the fact that cryptocurrencies also support essential trade and the survival of families in the country.