Recent turmoil in Venezuela and Iran has once again highlighted the complex dual role of stablecoins like Tether’s USDT. In both countries, dollar‑pegged digital assets have become crucial economic tools — serving as a lifeline for ordinary people facing collapsing currencies, while also being used by sanctioned entities to skirt financial restrictions.
In Venezuela, ongoing economic crisis, hyperinflation, and strict U.S. sanctions have driven both citizens and institutions toward stablecoins. Tether’s USDT has become deeply embedded in the country’s financial ecosystem, with some estimates suggesting that around 80% of the nation’s oil revenue is now settled in USDT rather than U.S. dollars, helping Caracas navigate limited access to traditional banking channels. Stablecoins have also been widely adopted by individuals and businesses to preserve value, make daily transactions, and bypass dollar shortages that have crippled the economy.
In Iran, economic distress and international sanctions have similarly pushed digital assets into the spotlight. According to recent blockchain analysis, Iran’s Islamic Revolutionary Guard Corps and associated actors have used cryptocurrency — particularly Tether’s USDT on networks like Tron — to move large volumes of funds outside traditional financial systems, in some cases to evade sanctions.
Together, these cases illustrate the duality of stablecoins: they can offer much‑needed financial stability and access for populations cut off from conventional banking, yet they can also be exploited as mechanisms to bypass international sanctions and regulatory controls. This tension underscores broader debates about the role of digital assets in global finance.
Crypto and stablecoins have become vital tools for many Iranians as the country’s currency, the rial, has sharply lost value against the U.S. dollar over many years. With inflation biting and access to traditional financial services limited, dollar‑pegged tokens such as Tron‑based Tether (USDT) have grown in popularity as a way to hedge against currency risk and preserve savings. Experts say USDT is often the most widely used digital asset in Iran for these purposes.
However, broader adoption faced setbacks in 2025. The country’s largest exchange suffered a major hack, and stablecoin usage was further disrupted when several Iranian‑linked addresses were blacklisted by Tether after being tied to illicit activity. At the same time, Iranian authorities imposed strict limits on stablecoin holdings and purchases, capping annual buys at $5,000 per person and total holdings at $10,000.
Stablecoins have also been exploited by sanctioned actors. According to blockchain analytics firm TRM Labs, Iran’s Islamic Revolutionary Guard Corps (IRGC) moved roughly $1 billion in stablecoins through two UK‑based crypto exchanges between 2023 and 2025, using primarily USDT on the Tron network to evade international sanctions.
In Venezuela, a similar dynamic has unfolded as the bolívar has collapsed under hyperinflation and economic instability. Venezuelans increasingly use USDT in everyday transactions — from paying for goods and services to managing business cash flow — and the stablecoin has become an operational “digital dollar” amid shortages of physical currency and banking limitations.
These cases illustrate how stablecoins can serve a dual role: as a lifeline for citizens in economies suffering from currency collapse and sanctions, while also presenting challenges when used by sanctioned entities or for sanctions evasion.
“Stablecoin adoption has gone so far into Venezuela that even without having regulated venues where you can buy and sell them, people still choose to go for stablecoins as opposed to using the local banks.”
The Wall Street Journal also highlighted that Venezuela’s state‑run oil company, Petroleos de Venezuela (PdVSA), has increasingly relied on Tether’s USDT to conduct crude oil transactions in order to sidestep U.S. sanctions imposed in 2020. Reports estimate that around 80% of the country’s oil revenue is now collected in USDT, with stablecoins frequently used to settle both incoming and outgoing payments in place of traditional dollars.
To counter misuse of its stablecoin, Tether has been cooperating with U.S. authorities to blacklist and freeze wallets linked to sanctioned activity. Data compiled by blockchain analytics firm AMLBot shows that Tether froze approximately $3.3 billion worth of USDT across thousands of addresses between 2023 and late 2025, with a significant portion of these actions targeting addresses on the Tron network.
Over a recent weekend, Tether reportedly froze an additional $182 million in Tron‑based USDT across five wallets, although it has not been confirmed whether those addresses were connected to Venezuela or Iran.
Tether’s blacklist and freezing efforts are part of its broader compliance strategy to work with law enforcement and help prevent the stablecoin from being used for sanctions evasion and other illicit purposes, even as USDT continues to play a major role in global crypto markets.
