Tether and Stablecoins in Venezuela and Iran: Dual Roles
Unrest in Venezuela and Iran has renewed attention on the dual role of U.S. dollar–pegged stablecoins such as Tether, which function as a financial refuge for residents while also appearing in transactions by sanctioned entities. Both countries entered 2026 facing sanctions, inflation, political instability, and cost-of-living pressures, with crypto assets and stablecoins becoming a notable part of local financial activity.
Iran’s stablecoin ties
Iran has seen nationwide protests over the past two weeks amid deteriorating economic conditions and the Iranian rial’s slide to record lows against the U.S. dollar. The situation escalated from local demonstrations to widespread unrest, with thousands arrested and hundreds reportedly killed, and authorities cut domestic internet access on Thursday.
With the rial in long-term decline, crypto and stablecoins have become tools for Iranian citizens to preserve value. Tron-based Tether (USDT) is reportedly the most used asset, helping users hedge inflation and systemic risk. Overall adoption slowed in 2025 following a hack at the country’s largest exchange and a substantial number of Tether blacklistings. In late September, the government set annual limits on stablecoin usage, allowing citizens maximum holdings of $10,000 and maximum purchases of $5,000 per person.
A report released Friday by blockchain analytics firm TRM Labs alleges that since 2023, Iran’s Islamic Revolutionary Guard Corps (IRGC) has moved over $1 billion in stablecoins through two “UK-based front companies,” Zedcex and Zedxion. TRM Labs said the two firms, despite appearing separate, operated in tandem as financial infrastructure for the IRGC within a broader sanctions-evasion network, moving value across borders, currencies, and jurisdictions. The report also identified Babak Zanjani as a key figure in the network, noting his prior sanctions for laundering billions in oil revenues for regime entities, including the IRGC.
Venezuela’s extensive use of USDT
Venezuelans have similarly turned to USDT to manage economic uncertainty as the bolivar has sharply depreciated over the past decade.
Amid low confidence in banks, USDT is reportedly used for routine payments, with many opting for crypto wallets instead of traditional accounts. The Wall Street Journal reported that 71-year-old Venezuelan crypto entrepreneur Mauricio Di Bartolomeo described USDT as commonly used for everyday services, adding that adoption is widespread enough that many prefer stablecoins over local banks even without regulated venues.
The Wall Street Journal also reported that state-run oil company Petroleos de Venezuela began requesting direct payments in USDT to mitigate sanctions first imposed in 2020. The company is estimated to accept 80% of oil revenue via Tether and regularly uses the asset to settle both incoming and outgoing transactions.
Tether blacklisting efforts
The Wall Street Journal reported that Tether has worked with U.S. authorities to blacklist dozens of wallets linked to Venezuela’s domestic oil trade.
According to a Dec. 5 report from AMLBot, Tether blacklisted approximately $3.3 billion in funds between 2023 and late 2025, including $1.75 billion in Tron-based USDT. Over the weekend, the company reportedly froze an additional $182 million in Tron-based USDT across five wallets; there has been no confirmation that these actions were related to Venezuela or Iran.
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