Role Of Tether’s USDT Venezuela And Iran Highlights Duality Of Stablecoins

Recent turmoil in Venezuela and Iran has again put the spotlight on the duality of stablecoins, with the US dollar-backed assets such as Tether acting as both a savior for embattled citizens and a tool for blacklisted entities to evade sanctions. 

Both Venezuela and Iran have been catching headlines at the beginning of 2026 amid political uncertainty and civil unrest. With both facing a host of sanctions, inflation, political instability, and a cost-of-living crisis, crypto and stablecoins have become an important part of the ecosystem. 

Iran’s stablecoin entanglement

Iran has seen protests erupt across the country over the past two weeks in response to worsening economic conditions and the Iranian rial tanking to record lows against the US dollar.  

The situation has escalated from local demonstrations to widespread protests across Iran, with thousands arrested and hundreds reportedly killed. Amid this backdrop, the Iranian government also moved to cut off domestic internet access on Thursday. 

Crypto and stablecoins have become an important tool for citizens in Iran, given that the Iranian rial has been plummeting in value against the US dollar for decades.

Tron-based Tether (USDT) is reportedly the most utilized asset in the country, with citizens using the asset to hedge inflation and systemic risk.  

Broader adoption took a hit in 2025, however, with a hack on the country’s biggest exchange and a significant number of Tether blacklistings. Meanwhile, the government also set an annual limit on stablecoins in late September, allowing citizens max holdings of $10,000 and max purchases of per person $5,000. 

But stablecoins have also been used by sanctioned entities. A report from blockchain analytics firm TRM Labs on Friday indicates that since 2023, Iran’s Islamic Revolutionary Guard Corps (IRGC) has moved over a $1 billion worth of stablecoins via two “UK-based front companies” called Zedcex and Zedxion. 

The report claimed that despite the two firms publicly presenting themselves as individual firms, they have been quietly functioning together “as financial infrastructure for the IRGC.”  

“In practice, they operate as a single enterprise embedded within a broader Iranian sanctions evasion ecosystem, moving value across borders, currencies, and jurisdictions on behalf of one of the world’s most heavily sanctioned military organizations,” TRM Labs said. 

“A key figure in this network is Babak Zanjani, a longtime Iranian sanctions-evasion financier previously sanctioned for laundering billions in oil revenue on behalf of regime entities, including the IRGC,” TRM Labs added.  

Venezuela is closely entwined with USDT 

Similar to Iranians, Venezuelans have also adopted USDT to protect themselves against economic uncertainty, as the Venezuelan bolivar has plummeted over the past decade. 

Related: Fiat inflation drives crypto adoption across the globe

A severe lack of trust in banks has reportedly seen USDT so widely adopted that everyday people use the asset to pay for all kinds of everyday services, opting to set up crypto wallets instead of using bank accounts. 

“It’s how you pay your landscaper and how you pay for your haircut. You can use tether basically for anything,” 71-year-old Venezuelan crypto entrepreneur Mauricio Di Bartolomeo told the Wall Street Journal on Saturday, adding: 

“Stablecoin adoption has gone so far into Venezuela that even without having regulated venues where you can buy and sell them, people still choose to go for stablecoins as opposed to using the local banks.”

The WSJ also highlighted that USDT is highly utilized by Venezuela’s state-run oil company, Petroleos de Venezuela. The firm reportedly started demanding payments directly in the stablecoin to avoid sanctions that were first imposed back in 2020. 

The company is estimated to accept 80% of all its oil revenue via Tether and frequently uses the asset to settle incoming and outgoing payments.

Tether uses blacklists to fight sanction evaders

The WSJ report adds that Tether has been fighting this by cooperating with the US government to blacklist “dozens of wallets” tied to the domestic oil trade.