The Venezuela and Iran cases highlight the stablecoin's "dual nature," where USDT serves as a tool for everyday transactions but is also used for sanctions evasion.

January 12th Recent turmoil between Venezuela and Iran has once again put stablecoins’ dual role in the spotlight. US dollar-backed stablecoins—especially Tether (USDT)—serve as a critical store of value and payment tool for everyday people in inflation-stricken, financially constrained nations. At the same time, they’ve been used by some sanctioned groups to make cross-border transfers and evade sanctions. In Iran, the rial’s long-running devaluation, combined with sanctions and social unrest, has made crypto a key hedge against inflation and systemic risks. The 2025 hack of Iran’s largest crypto exchange, plus multiple blacklistings of USDT addresses, hit stablecoin adoption hard. Last September, Iran’s government imposed annual stablecoin limits: individuals may hold up to $10,000 in stablecoins and make annual purchases no exceeding $5,000. Compliance concerns have also drawn scrutiny. Blockchain analytics firm TRM Labs notes that since 2023, Iran’s Islamic Revolutionary Guard Corps (IRGC) has allegedly moved over $1 billion in stablecoin assets via two UK-based front companies to set up cross-border, cross-jurisdictional funding channels. In Venezuela, USDT penetration is similarly deep. Ongoing devaluation of the local bolivar and public distrust in the banking system have made stablecoins widely used for daily payments—from basic services to small transactions. Reports indicate Venezuela’s state-owned oil firm PDVSA has relied heavily on USDT for oil settlements since 2020; an estimated 80% of its oil revenue is settled via Tether to get around sanctions-imposed restrictions. Analysts say the Iran and Venezuela cases again show stablecoins are acting as both “livelihood infrastructure for everyday people” and “a source of compliance headaches” in the global financial system. This contradiction is expected to remain a key focus for regulators and market players in 2026.