Crypto Is Now Central to Venezuela’s Economy—And Poses Sanctions Risks: TRM

Venezuelas relationship with cryptocurrency did not begin as an investment idea like the ones you see in Silicon Valley. It started because the country was in a tough spot. Venezuela was going through a period of economic trouble it had many problems with its currency and it was facing a lot of sanctions. All of this made everyday financial tasks very difficult and costly for people in Venezuela. People, in Venezuela found it hard to save money pay for things import goods and even get paid for their work. Venezuelas cryptocurrency situation grew out of these problems. Venezuelas people were looking for ways to make their financial lives more stable. That is how cryptocurrency became important in Venezuela. What TRM Labs is pointing to in its recent analysis—popularized by coverage like Decrypt’s “Crypto Is Now Central to Venezuela’s Economy—And Poses Sanctions Risks”—is that crypto in Venezuela has shifted from “alternative” to “infrastructure.” And once crypto becomes infrastructure, it also becomes a sanctions and compliance flashpoint: the same rails that help families and small businesses survive can also be exploited by sanctioned actors seeking to move value outside the traditional banking system.

Below is what the phrase “crypto is now central” means for people in Venezuela why stablecoins are more important than Bitcoin when it comes to everyday life and where the real risks of sanctions come from, for crypto.

1) Why Venezuela is a “natural habitat” for stablecoins

To understand why crypto is so important in Venezuela we need to look at the situation that people in Venezuela have been dealing with. The crypto in Venezuela is a deal because of what has been happening to the economy. Venezuelans have been living through some tough times and crypto has become a central part of that. The economic reality that people in Venezuela face every day is the reason why crypto’s central, in Venezuela.

The high inflation and the problems with the currency made people lose faith in the bolívar. They did not think it was an idea to save their money in bolívar because of this. The bolívar was not seen as a place to put their money. People lost trust in the bolívar times because of the high inflation and the problems, with the currency. The bolívar was supposed to be a store of value but it was not.

Dollarization is something that really happens: when the government tries to control the money, people and businesses usually price things in dollars or the same value as dollars when the money, in their own country is not stable.

Fragile access to banking and cross-border payments, made worse by sanctions and risk-avoidance by international financial institutions (“de-risking”).

Businesses have a problem when it comes to importing things. They really need money that’s like the money from their own country to buy goods from other countries. This is an import dependency. Businesses need this kind of money which’s, like hard currency to buy goods abroad.

In that environment, the “killer app” isn’t a volatile coin you hope goes up. It’s a dollar-like instrument that moves easily, and that’s exactly what stablecoins (especially USDT) provide: a digital dollar proxy that can be held on a phone, transferred quickly, and often exchanged through informal markets. Reuters has reported that Venezuela has been gradually permitting broader use of dollar-pegged crypto (especially USDT) in parts of the private sector for exchange and payments as dollars became scarce.

When TRM talks about crypto being central they do not mean that everyone is buying and selling coins. What TRM means is that stablecoins are being used like money for daily things. TRM is saying that people are using stablecoins as a way to move money around. This is what TRM is getting at when they say crypto is central that stablecoins are, like the pipes that money flows through every day. TRM is focused on how stablecoinsre being used as everyday money.

2) The term “Central” does not mean that everyone loves crypto. It actually means that crypto is able to solve the problems that people face every day. Crypto is something that can help people with problems. The idea of “Central” is that crypto is useful for life and it can make things easier, for people. Crypto is not something that people like it is something that can be used to solve real problems that people have every day with crypto.

In a lot of countries people do not have to use crypto.. In Venezuela more and more people and companies are using it because it helps them deal with big problems. Here is how crypto is helping people, in Venezuela:

A) Preserving value (saving) when the local currency is unreliable

People who can’t reliably save in bolívars look for alternatives. Dollars are one option—but physical cash is risky to carry and can be hard to obtain at fair rates. Stablecoins let users hold a dollar-like asset digitally, sometimes in small amounts, and sometimes with fewer frictions than physical cash. The Financial Times described stablecoins like USDT becoming popular for savings and daily purchases as people seek alternatives to the bolívar.

B) Paying and getting paid (commerce)

Merchants accepting stablecoin payments is a big indicator of “crypto as infrastructure.” The FT reported that shops ranging from small independents to larger chains were taking payments through digital wallet platforms, and some businesses used crypto to pay staff.

That matters because once payroll and retail payments start using crypto you are no longer in a group of people who use crypto. You are in something that is similar to a separate payment system. Crypto is becoming a part of a payment network. When payroll and retail payments use crypto it means crypto is being used by people for everyday things. This is important, for crypto.

C) Moving money across borders (remittances + imports)

Remittances are really important for countries, in Latin America. In some places it is hard. Costs a lot to send money through banks. That is when crypto rails start to look like an option. For companies that bring in goods from countries stable coins can also be used to settle payments when the usual ways of paying are not working well.

3) Why USDT (and “informal P2P”) is the heart of the story

A key point in TRM-linked reporting is that Venezuela’s crypto economy is heavily shaped by informal peer-to-peer (P2P) markets—channels that can work with minimal friction, but that also create compliance blind spots. Decrypt’s write-up of TRM’s research highlights reliance on informal P2P markets and the resulting sanctions-evasion concerns.

Decrypt

Why P2P is so powerful in Venezuela

People, to people markets which’re sometimes on special websites sometimes on messaging apps and sometimes they use brokers or community networks usually exist for a few reasons:

People may not be able to get to the places where they can buy and sell cryptocurrency easily. The banks and the exchanges where people buy and sell cryptocurrency are not always easy to use for everyone.

The official exchange systems that are in place can be really limited. They can also be inconsistent. Sometimes these official exchange mechanisms are controlled by politicians, which’s not a good thing, for the official exchange mechanisms. The official exchange mechanisms may not work properly because of this.

People really want things to be fast and easy, for them even if that means they do not have many safeguards to protect the consumer. People are looking for speed and convenience when they are shopping. They are willing to accept that consumer protections might be weaker.

Reuters reported that only selected banks and approved mechanisms were involved in some conversions, which implies that outside the “official” pipes, informal alternatives still matter a lot.

Stable coins are really good for use. They are better than Bitcoin for this. Bitcoin can be very volatile. This means the value of Bitcoin can go up and down a lot.

Stable coins are different from Bitcoin. They are designed to be stable. This makes them very good for people who want to use them to buy things. People can use stable coins to buy things they need every day.

Here are some reasons why stable coins are better than Bitcoin for use:

* Stable coins are more stable than Bitcoin.

* People can use stable coins to buy things they need.

Stable coins are also very good for sending money to people. They are fast and safe.

Overall stable coins are a choice for people who want to use cryptocurrency for everyday things. Stable coins are better than Bitcoin, for this because they are more stable.

When we buy things every day the price should not change much. Bitcoins price goes up and down a lot so it is hard to know how much groceries or wages will cost. Stable coins are, like the money we use. So when people say “crypto is central” what they really mean is that stable coins are central.

4) The state angle: oil, sanctions pressure, and crypto settlement

The topic of crypto is getting a lot of attention from compliance teams and governments. This is not just because a lot of people are using it. The main reason is that some entities and networks that are not allowed to do business might use crypto to make payments. These payments are harder to stop than the ones made through banks. Compliance teams and governments are worried that sanctioned entities and networks will use crypto to route payments in ways that’re really hard to block unlike bank wires.

Reuters reported that Venezuela’s state oil company PDVSA has increasingly adopted digital currencies for transactions, amid sanctions that restrict traditional payments and access to foreign currency.

The Atlantic Council has also discussed reporting indicating sanctioned entities (including PDVSA) using crypto—particularly stable coins—for oil payments, and frames it as a growing concern for sanctions strategy.

This is the point where the risk of sanctions becomes really important and has an impact, on the situation the sanctions risk is what is holding everything together the sanctions risk is the key factor.

If a seller who has been sanctioned can get something of value in stablecoins that is a problem. The seller who has been sanctioned should not be able to get stablecoins because that would be like getting money. The stablecoins are, like money so the sanctioned seller should not be able to receive them. This is because the sanctioned seller is not supposed to be able to get any value in stablecoins or anything else. The whole point of sanctioning the seller is to stop them from getting things of value including stablecoins.

If those stablecoins can be moved through a web of wallets, brokers and offshore counterparts it is really interesting to think about what happens to those stablecoins. Those stablecoins are like money that is supposed to be safe. So when those stablecoins can be moved around a lot it makes you wonder. Those stablecoins go from one wallet to another to brokers and even to people in other countries like offshore counterparts. This is, about those stablecoins.

then the traditional choke points (banks, correspondent banking, SWIFT) matter less.

That does not mean that crypto automatically makes sanctions useless. It means that the people who enforce sanctions have to do things a little. They have to track the money that is moving in and out of crypto wallets. They have to freeze the assets at the companies that issue stablecoins when they can. They have to go after the people who help make these transactions happen.. They have to put pressure on other countries to also enforce these sanctions on crypto. This is how sanctions enforcement changes, with crypto.

5) The enforcement context: rising tensions and heightened scrutiny

TRM’s warning is also time-linked: when geopolitical tension rises, scrutiny rises too. Reuters reported on intensified U.S. pressure affecting Venezuela’s oil trade, warning it could reduce foreign-currency inflows (including crypto inflows tied to oil activity) and worsen inflation dynamics.

And TRM-linked coverage argues that Venezuela’s crypto activity “should be considered” as U.S.–Venezuela tensions escalate, because the incentive to find alternative rails grows under pressure.

So the idea that crypto is central is partly about what’s happening now with people using it to buy and sell things. It is also partly about what might happen in the future because if there is a lot of pressure crypto can be used in ways that’re harder to keep track of. The crypto is central point is important because it shows how people are using crypto to make transactions and the crypto is central idea is also about how this could lead to activity, in secret channels.

6) So where do the risks of sanctions actually come from I mean the way they work and all that. The thing is, sanctions risks come from the sanctions themselves and how the sanctions are set up and managed and that is what we need to look at to understand where the sanctions risks actually come from.

It is easy to say things like “crypto helps people evade”.. That does not really help us. The useful question is: which parts of the crypto ecosystem are actually creating the risk, for crypto?

Risk 1: Low-KYC / informal broker networks

If people can buy/sell stablecoins through brokers with limited identity checks, it’s easier for bad actors to blend into high-volume legitimate flows. TRM-linked reporting emphasizes that P2P markets can have minimal KYC measures, which increases enforcement difficulty.

Risk 2 is, about something called Commingling. This is when survival money that people need to live mixes with bad money from illegal activities. So you have these two kinds of money the legitimate survival flows and the illicit flows, all combined together. The legitimate survival flows are the money that people need to survive and the illicit flows are the money that comes from doing something.

In Venezuela a lot of things that people do are pretty normal. For example families try to save their money small businesses pay the people they buy things from. Workers get their paychecks. The problem is that some bad people use the system to do illegal things. This makes it really hard to figure out who is doing what because there are many normal things happening at the same time. It is not, like a group of people doing something bad in secret. The thing that makes this situation different is that many people are using the system for normal things like families and small businesses that it helps hide the bad things that some people are doing. Venezuela has a lot of activity like families preserving purchasing power small firms paying suppliers and workers receiving wages in Venezuela.

Risk 3: Cross-border layering

Sanctions evasion is something that people do to get around the rules. It usually involves moving money through different places and people to hide where it came from. Crypto transactions can be seen by anyone on chains but it is really hard to figure out who is, behind the transaction when people can easily create new wallets and use middlemen that are not part of the chain like brokers who do deals without using the internet or money changers and fake companies. Sanctions evasion is a problem and crypto transactions are just one part of it.

There is a risk with stablecoins. This risk is that there are some bottlenecks in the system.. These stablecoin bottlenecks are not everywhere. They do not affect all stablecoins. Stablecoin chokepoints are a problem. They are not a problem, for every single stablecoin.

Some stablecoins can be frozen by the people who made them under conditions.. :

Some tokens do not have the controls as other tokens. The controls for tokens can be different from one token to another. Not all tokens have the same controls. This means that the controls for some tokens are unique, to those tokens. Tokens have controls and not all tokens have the same controls.

Not every transaction actually goes through an exchange because some transactions do not meet the requirements of a compliant exchange. The thing is, a compliant exchange is very specific and every transaction is different so not every transaction will touch an exchange.

Actors can do a lot of things. They can move across chains. They can use bridges. Actors can also swap into assets. This means actors have a lot of freedom to move around and actors can change into assets if they need to. Actors are really flexible. Actors can do many things with the assets they have.

Enforcement is like a game of cat and mouse. You have to follow the money flows and find out who the service providers are. Then you have to put pressure on the bridges that connect the world to the regulated world. This is how enforcement works with the bridges to the world and the service providers, in the regulated world.

Risk number 5 is about what happens when there are sanctions. These sanctions can affect people and businesses too. This is what we call a sanctions spillover. The sanctions spillover can be a problem, for users and businesses.

The uncomfortable truth is that when an entire country relies on stablecoins for its financial system being too strict can cause problems for a lot of people. This is because stablecoins play a role in the financial infrastructure of the country and stablecoins are what people are using to get things done. So when the rules are enforced strictly it can hurt the people who use stablecoins and that can be a big problem for stablecoins and the country, as a whole.

Some exchanges might go far and stop all users from Venezuela from using them. This means that exchanges are being very careful and blocking users in general.

Banks and fintech companies might not want to do business with linked money transfers. This is because they do not want to take on any risk that comes with dealing with linked financial transactions. Banks and fintech companies are being very careful, about linked flows.

Merchants and freelancers may lose the ability to use payment systems even when they are doing nothing. This can happen to merchants and freelancers even if they are following all the rules. Merchants and freelancers need payment systems to get paid so losing access to these systems can be a problem, for them.

There is a problem here. The reality of helping people is very different from the goals of enforcing the law. That is why people who study and make policies think that the issue of reality versus enforcement goals is a serious matter. The issue of reality, versus enforcement goals is something that these people care about.

7) What happened to Venezuelas state cryptocurrency projects and the people who regulate them?

Venezuela has experimented with state-backed crypto narratives for years, most notably the Petro. But reporting and summaries of the ecosystem note that the Petro was effectively abandoned and that the national crypto regulatory apparatus has faced crisis and scandal. For example, TRM-linked summaries circulating in December 2025 note the Petro’s abandonment and the weakened role of the national crypto regulator amid corruption issues.

The main thing to remember is that the big thing about crypto now is not that crypto, from the government is doing well but rather:

a bottom-up stablecoin economy, plus

selective institutional usage, including alleged oil-linked settlement mechanisms.

8) What does this mean for people who use exchanges, fintech companies and regular traders when it comes to following the rules?

If crypto is really important, in Venezuela then a lot of things that seem normal can actually be connected to Venezuela. This brings up some questions:

For exchanges

Stronger geographic risk controls, but calibrated to avoid blanket exclusion of innocent users.

Enhanced monitoring for patterns associated with sanctions evasion: rapid layering, repeated interactions with high-risk OTC clusters, links to known PDVSA-associated typologies (where identified), etc.

We need to be careful when we deal with stablecoin flows. These stablecoin flows often go to high-risk places. Then come back again. We have to watch the stablecoin flows closely because they keep touching these high-risk endpoints. This means we have to handle the stablecoin flows carefully to avoid any problems, with the stablecoin flows.

For stablecoin issuers and infrastructure providers

Better tooling to respond to lawful requests and sanctions updates.

The company needs to have rules about freezing accounts making blacklists and working with the police. This is because the people in charge of issuing things can stop everything from working if they want to so they have a lot of power over what happens. They are like a checkpoint that everything has to go which is why we need these clear rules, for freezes, blacklists and law enforcement cooperation.

For traders and freelancers

People who use these services can have their accounts closed or their money frozen if they do business with someone whose address is later marked as bad even if they did not know about it. This is a problem when people are dealing with each other a lot because you do not always know who you are dealing with and they might not be honest, about who they are.

9) What does TRMs idea of being “central to the economy” mean for TRM. The way TRM frames this concept of being central to the economy is very important. TRM is trying to say something with this phrase about TRM and its role. We need to think about what TRM’s really getting at with this idea that TRM is central to the economy. TRM wants us to understand that TRM plays a part in the economy.. What does that really mean for TRM and, for all of us.

When a company, like TRM does this to a country it is not just talking about how much people’re using something. The company TRM is also giving a message to governments and the people who make sure everyone follows the rules:

Treat Venezuela-linked crypto exposure as material, not edge-case.

Assume enforcement attention will rise if political pressure rises.

Expect sanctions-evasion typologies to evolve, especially around stablecoins and P2P markets, because that’s where the liquidity and day-to-day utility sit.

This doesn’t mean “all Venezuelan crypto activity is illicit.” In fact, some of the most credible reporting stresses it’s often a lifeline for ordinary people and firms.

The combination of a size and a relaxed atmosphere along with the pressure from sanctions creates a situation that bad people can take advantage of. This situation, with size and informality and sanctions pressure is something that bad people can use to their advantage.

10) Big picture: Venezuela as a preview of “sanctions-era money”

Venezuela is a country that might be showing us something that will happen a lot more in the future. The world could see this same thing happening in places too. Venezuela is, like a sign of what’s to come.

When a country is in a lot of trouble and has a time getting money from other countries the country faces severe problems and it is really tough for the country to get help from global finance. The country has a problem because the country does not have easy access, to global finance.

People and businesses will use what works for them. They do this because it is the way to get things done. People and businesses adopt whatever works and that is how it is.

Stablecoins are really useful because they work like the dollars you have, in your pocket. This is why stablecoins often become the useful tool since stablecoins can be easily moved around and used like regular money, like dollars.

That creates a policy paradox because it is a situation where the policy is saying one thing. The result is the opposite of what the policy of the company is trying to do which is really confusing, for the policy and the people who have to follow the policy.

If you crack down hard on something you risk pushing more of that activity into secret channels, which are very hard to see into. This means that the activity will still be happening. It will be happening in the dark so to speak and that can be a real problem. Crack down hard and you will push more activity into these opaque channels, where it is very difficult to keep track of what is going on with that activity.

If you crack down softly then you are taking a risk. You might leave a way for people like sanctioned actors to still do what they want. This is because cracking down softly on sanctioned actors can give them a chance to find a way, around the rules.

TRM’s warning is essentially: Venezuela’s crypto economy is now big enough that sanctions strategy can’t ignore it.