As cryptocurrencies become more popular, there is a shift from traditional banking systems to new methods like USDT. This stablecoin is used by a few companies in Venezuela as a way of sidestepping sanctions. By using tether, these companies are able to purchase goods and services illegally and still stay within the law. This new form of payment is changing the way businesses do business, and shows how cryptocurrencies can be used for more than just bitcoin.
Alternative payment method for Venezuelan SMEs caught up in sanctions
According to local analysts, 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. The use of USDT is mainly related to inflation and devaluation, but it has also been discovered recently that companies are settling commercial exchanges using USDT. The sanctions have restricted the access of Venezuelan SMEs to international transfers, currency, and suppliers, but they have found an alternative method of payment in USDT. USDT is a relatively new stablecoin, and its use is still being explored, so there may be other applications for it that we haven’t yet discovered.
Cryptocurrencies like USDT offer a new way for companies to do business that avoids traditional banking systems
In October of 2019, five Russian nationals and two oil brokers were indicted by the Department of Justice for using USDT to purchase equipment for the Russian military and then selling Venezuelan oil. It is unknown if this scheme involved USDT specifically, but it is possible that USDT is being used more widely in Venezuela than previously thought.
Reports indicate that USDT is being used as a method of payment throughout Venezuela to avoid sanctions, as well as to circumvent doubt over the bolivar’s stability. Cryptocurrencies like USDT offer a new way for companies to do business that avoids traditional banking systems. This could be beneficial for both Venezuelan businesses and the country as a whole.
While there are still many unknowns surrounding the use of cryptocurrencies in Venezuela, their potential seems clear. In a time where sanctions are starting to take their toll on the country, utilizing cryptocurrencies could help businesses and individuals to skirt those restrictions.
Cryptocurrencies, such as USDT, offer a new way for companies to do business that avoids traditional banking systems, which can be helpful in situations where sanctions have been put in place.