Hyperinflation in Venezuela: USDT becomes the new bolivar amid the collapse of the national currency
Over the last thirty days, the value of the stablecoin Tether (USDT) in Venezuela has surged approximately 16% against the national currency, the bolivar. At its peak on the Binance P2P platform, the exchange rate reached 810 bolivars per USDT, starting from a level of 690.
This sharp jump is a direct consequence of the rapid increase in the volume of cash bolivars in circulation. Obtaining regular paper money from banks is becoming increasingly difficult, and the population is panicking, seeking alternatives to preserve their savings.
Money supply exceeds 2 trillion bolivars
According to the Central Bank of Venezuela, by the end of May, the country's money supply exceeded 2.11 trillion bolivars (equivalent to $3.58 billion). This figure grew by approximately 69% in the first quarter. Thus, since January, the money supply has more than doubled.
This acceleration points to a growing gap between the supply of traditional foreign currency and the enormous demand for it. The country's residents are striving to protect their savings from devaluation by any means possible. As more bolivars compete for a limited amount of hard currency, the population is increasingly turning to stablecoins. People use them as digital dollars to preserve their savings. The exchange rate rose steadily until mid-June, after which it retreated slightly from its peak values.
Banks limit access to the dollar amid rising demand
Official financial channels can no longer cope with the avalanche of demand. Analysts note that central bank interventions and the operations of commercial bank exchange offices are not producing the desired effect.
As soon as banks exhaust their dollar limits, their automated systems shut down. This leaves businesses and ordinary citizens unable to purchase currency at the official rate. The restriction of opportunities in the legal market leaves companies and families with few alternatives.
Therefore, those who cannot use official exchange services turn to P2P platforms. On such platforms, the USDT token has already become the world's leading retail stablecoin. This shift clearly illustrates the general trend of growing cryptocurrency popularity in countries with high inflation.
USDT determines the street exchange rate
Analyst Ever Castro notes that the difference between exchange rates is already shaping everyday trade. Sellers in Caracas markets — La Hoyada, El Cementerio, and Catia — use the USDT rate to purchase goods, with some offering rates of up to 1,200 bolivars per dollar.
"Today we see a typical situation from the Chávez era — the parallel rate (USDT) has soared to 810 bolivars and is not stopping, the money supply is 2.11 trillion bolivars. The intervention of the Central Bank of Venezuela in the market has failed: many simply could not buy currency and went to Binance," says the analyst.
For several years, USDT has effectively replaced the dollar in Venezuela against a backdrop of constant inflation. The token itself maintains near parity with the dollar, and its steady market capitalization growth confirms its status as a crypto equivalent of the dollar.
On the global market, USDT trades near $1, and its market capitalization exceeds $186 billion.
Expert opinion: Until the Central Bank of Venezuela solves the fundamental problem — curbing hyperinflation through control over money issuance — demand for USDT will only grow. The current situation is not just a crisis of confidence in the bolivar, but a complete dollarization of the economy through cryptocurrencies, which the authorities are unable to stop. P2P platforms are becoming the only lifeline for the population.