Venezuela on the brink of a new hyperinflation: demand for USDT has surged by 16% in a month
The economic crisis in Venezuela continues to fuel a mass exodus of the population into cryptocurrency. Over the past thirty days, the value of the Tether (USDT) stablecoin relative to the national currency, the bolivar, has increased by approximately 16%. At its peak on the Binance platform, the exchange rate reached 810 bolivars per USDT, starting from a level of 690.
This surge is a direct consequence of a sharp increase in the volume of cash bolivars in circulation. Obtaining physical dollars or euros from banks is becoming practically impossible, and the population, in a desperate search to protect their savings, is turning to digital assets.
Money supply exceeds 2 trillion bolivars
According to my data, obtained from official sources, by the end of May, the volume of the money supply in the country exceeded 2.11 trillion bolivars (about $3.58 billion). The growth for the first quarter was a colossal 69%. Since January, the supply of the national currency has more than doubled.
Such acceleration of the printing press inevitably leads to a gap between the supply of hard currency and the demand for it. Citizens, seeing their savings melt before their eyes, strive by all means to convert bolivars into stable assets. Stablecoins, and primarily USDT, are becoming digital dollars for them—the only available safe haven.
Banks can't cope, P2P thrives
Official financial channels and commercial banks can no longer satisfy the avalanche-like demand for foreign currency. As soon as banks exhaust their daily limits on dollar sales, their automated systems simply shut down. This leaves businesses and ordinary citizens without a legal way to buy currency at the official rate.
The only way out is P2P platforms, where USDT has long become the main retail stablecoin. There, unlike the official market, supply exists, albeit at a higher price. This trend is a clear example of a global trend: cryptocurrencies are becoming a financial lifeline in countries with high inflation.
USDT determines the "street" rate
Analysts note that the USDT rate on P2P platforms is already effectively shaping everyday trade. Sellers in Caracas markets, such as La Hoyada, El Cementerio, and Catia, are guided precisely by the Tether rate when purchasing goods. Some sellers even set prices equivalent to 1,200 bolivars per dollar, significantly higher than the official rate.
"Today we are seeing a typical situation from the Chávez era," comments one local analyst on the situation. "The parallel USDT rate has soared to 810 bolivars and isn't stopping, the money supply volume is 2.11 trillion. The Central Bank's intervention didn't work: many simply couldn't buy currency and went to Binance." This quote accurately reflects the essence of what is happening.
Tether itself maintains its peg to the dollar on the global market, trading near $1, and its market capitalization exceeds $186 billion. The difference between the official and P2P rates in Venezuela practically never disappears as the money supply increases. New central bank interventions may temporarily curb further growth, but their effect will only be noticeable in the coming weeks, and it is unlikely to radically change the situation.
Expert opinion: Venezuela is a classic example of how fiscal irresponsibility and monetary expansion destroy the national currency. USDT here is not just an investment, but a means of survival. As long as the central bank continues to print bolivars, demand for stablecoins will only grow, and the P2P market will strengthen as an alternative financial system.