Crypto is expected to play a larger role in payments and settlement in Venezuela as sanctions disrupt traditional channels, Decrypt was told.
The U.S. capture of Venezuela’s President, Nicolas Maduro, over the weekend did little to dent crypto investors’ confidence, even as oil futures slid to their lowest level in four years.
Washington said its operation in the Latin American country was tied to superseding U.S. indictments alleging Maduro and senior allies of drug trafficking and corruption.
U.S. officials characterized the action as a law-enforcement operation, with reports indicating Maduro is expected to make an initial appearance on Monday in federal court in Manhattan.
WTI crude oil futures dipped to as low as $56.6 per barrel on Saturday, their lowest since February 2021, as speculation mounts over how the U.S. intends to manage the country’s vast resources.
Chevron shares surged 11%, a movement that financial markets commentary outlet Kobeissi Letter noted reflected expectations that U.S. control could unlock additional Venezuelan energy supply.
Crypto markets remained relatively stable, with Bitcoin and Ethereum notching up about 1% each. The broader crypto market capitalization moved up 2% to $3.2 trillion, per CoinGecko data.
Some say the episode could also revive scrutiny of Venezuela’s opaque use of digital assets at the state level.
Blockchain intelligence firms and former officials have long alleged that Caracas quietly accumulated Bitcoin and stablecoins through commodity-linked transactions as sanctions tightened, including oil sales settled outside the traditional banking system.
Those claims, which Venezuela has never acknowledged, suggest crypto functioned not just as a civilian lifeline but as a parallel settlement layer for state-linked trade when access to dollars and correspondent banks narrowed.
While a definitive figure for the country’s Bitcoin and crypto holdings remains elusive, some estimates peg it at $60 billion.
Venezuela has relied on crypto for years as a workaround amid sanctions, a currency collapse, and banking dysfunction.
In 2018, Maduro launched the petro as a state-issued cryptocurrency backed by Venezuelan oil and mineral reserves in an effort to circumvent U.S. sanctions and attract foreign financing, though it failed to gain traction and was later discontinued.
Further restrictions on the country’s access to the global financial system have propelled stablecoins to serve as a de facto dollar substitute for everyday commerce.
While this has benefited civilians and businesses, observers warn that the same channels can be used to circumvent sanctions and reroute trade and energy payments.
“Crypto and stablecoins have long played a dual role in Venezuela: they function as an essential financial rail for civilians in a fragile economy, while also offering an alternative settlement channel that state-linked actors and intermediaries can exploit when sanctions constrain access to the formal financial system,” Ari Redbord, global head of policy at blockchain intelligence firm TRM Labs, told Decrypt.
Federal prosecutors allege that Maduro led a long-running narco-terrorist conspiracy between Venezuela’s Cartel de Los Soles and Colombia’s FARC, a designated terrorist organization that became one of the world’s largest cocaine producers between 1999 and 2020.
According to the superseding indictment, senior Venezuelan officials used state institutions and the military to traffic large volumes of cocaine into the U.S., with prosecutors claiming the group deliberately sought to use drugs as a weapon against the U.S.
“The absence of any reference to cryptocurrency in the superseding indictment does not diminish this risk; it reflects prosecutorial focus on narcotics, corruption, and violence rather than a judgment that crypto is irrelevant to the regime’s broader financial ecosystem,” Redbord said.
Asked about risks, Redbord noted that after military action, “things move faster and become more fragile,” adding that when traditional trade and payment channels are disrupted, “people and networks turn more quickly to alternative ways to move money, including stablecoins.”
“At the same time, governments and private companies tend to respond more forcefully and in a more coordinated way. The result is a more volatile environment, where facilitators adapt quickly and financial patterns can shift in a short period of time,” he said.
At least three early signals can provide insight into coming changes, Redbord explains.
“First, changes in stablecoin demand and pricing. Rising local premiums, faster turnover, or shifts toward the most liquid stablecoin rails can indicate stress in traditional payment channels and increased reliance on crypto for everyday transactions and cross-border settlement,” he said.
There will also be “concentration or migration among intermediaries,” he noted. “Under pressure, activity often consolidates around a smaller number of exchanges, OTC brokers, payment agents, or informal facilitators that still provide reliable access to liquidity.”
Network behavior is also expected to be “consistent with adaptation,” he said, with “increased wallet rotation, shorter holding periods, additional intermediary layers, and more fragmented routing” possibly signaling “efforts to manage detection risk,” while conversely, “sudden drops in activity tied to specific services may indicate effective enforcement or de-risking.”
