Venezuela Crisis Reveals the Fragile Stability of Dollar-Pegged Stablecoins
Although stablecoins were designed to maintain a value equal to one US dollar, recent political and economic crises have shown that this “stability” can quickly erode under sudden demand shocks and collapsing confidence in local currencies.
Over the past weeks, USDT recorded a sharp surge in Venezuela, with its price reaching nearly $1.40 on some peer-to-peer trading platforms, coinciding with escalating tensions following the US attack on the country. The spike reflected widespread market panic, as citizens rushed to convert their savings into dollar-linked assets.
This situation highlights chronic liquidity distortions in crypto markets, one of the key obstacles that has long hindered the mass adoption of digital assets. At the same time, it underscores the growing role of stablecoins as a financial escape route for individuals living in politically and economically unstable environments, where they become a rapid alternative to dysfunctional traditional financial systems.
Developments indicate that the surge was not driven by speculative trading, but rather by urgent attempts to exit the local currency amid collapsing confidence in the Venezuelan bolívar. This pushed demand for dollar exposure via USDT, driving prices up by nearly 40% in a short period.