Some Companies in Venezuela have been using the stablecoin peg to get around sanctions and settle payments with international customers and suppliers. Local research shows that while the most common use case for the stablecoin involves it being purchased for inflation protection purposes, some firms are also profiting from it this way.
Research Indicates Companies in Venezuela are Taking Advantage of USDT to Avoid Sanctions
Although Tether’s USDT stablecoin is accessible in international locations like Venezuela, it is most commonly associated with inflation and devaluation protection, according to Chainalysis. However, another use case has recently been uncovered. Reports from local analysts indicate that a few businesses are utilizing USDT as a payment method for foreign customers and suppliers, who fear using conventional payment methods because of the risk of sanctions.
Juan Blanco, director of local consultancy Bitdata, states that numerous unnamed companies and consultores are engaging in USDT trades. Some of the money flow is coming from firms located in Asia and Russia. Blanco remarked:
These are the activities that are taking place in Venezuela with a lot of value, which are quoted in USDT. The challenge of the blockade means that little is exported. Nevertheless, the country can access the free, impartial blockchain payment mechanism to pay for goods and services.
Luis González, manager of Cashea, highlighted how the sanctions are having an impact on a local finance hub. Even SMEs are not exempt from their scope. González explained:
They have nothing to do with political issues and they are imposing sanctions on us. International transfers, currencies, fees and suppliers are not permitted. Clearly, most of the money is spent abroad and in foreign currency. The USDT is one option.
Crypto Used For Oil
Reports of the potential use of cryptocurrencies to get around sanctions in Venezuela date back to 2019, when the country’s central bank was investigating using ether and bitcoin as payment providers to PDVSA (the state oil company), according to Bloomberg.
More recently, in October, the Justice Department indicated that five Russians and two Venezuelans used USDT in a scheme to purchase equipment for the Russian military and to sell Venezuelan oil. The indictment states that at least one sale of 500 million barrels of crude oil may have been settled using USDT.
Focusing on the use of Venezuelan USDT, what have businesses discovered? Please leave a comment below.
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