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Some Venezuelan companies use the stabilization device as a way to bypass sanctions and settle payments with foreign clients and suppliers. Local records show that, whereas the most popular use case for stablecoin involves buying it for devaluation shield purposes, It's operated by a handful of companies as well.
Companies Are Reportedly Using USDT to Avoid Being Hurt by Sanctions in Venezuela
While the use of dollar-pegged stablecoins, like Tether’s USDT, in countries like Venezuela is mainly related to inflation and devaluation to Chainalysis, a second use case has also been discovered recently. Reports from local analysts state that a handful of companies are using USDT as a payment method for foreign customers and providers, which are afraid of using traditional payment means due to the risk of receiving sanctions.
According to Juan Blanco, director of local consulting firm Bitdata consultants, many unidentified companies are settling commercial exchanges using USDT, with part of this cash flow coming from companies located in Asia and Russia. Blanco :
There are things that are being produced in Venezuela with great value that are traded in USDT. What is not exported, because of the blockade question, leaves the country through a free and independent blockchain mechanism to pay for goods and services.
Luis gonzalez, director of cashea, a local funding platform, said sanctions affect Venezuelan companies, even when they are not considered within their scope. Gonzalez explained:
With sanctions, they limit us, and we have nothing to do with politics. Access to international transfers, money, payment methods and suppliers is restricted. Of course, most payments are made outside Canada and in foreign currencies. The only alternative that we have had is the use of USDT.
Crypto for Oil
reports of the possible implementation of cryptocurrencies for sidestepping sanctions in Venezuela come from 2019, when the central bank of the country was studying to use ether and bitcoin to pay providers of PDVSA, the state-owned oil company, according to Bloomberg.
More recently, in October, the Department of Justice indicted five Russian nationals and two oil brokers that were using USDT as part of a scheme to purchase equipment for the Russian military and sell Venezuelan oil. The indictment alleges that at least one sale of 500,000 million barrels of crude might have been settled using USDT.
What do you think about the usage that Venezuelan companies shave found for USDT? Tell us about it in the comments below.
