As Venezuela’s economic crisis deepens, there has been a significant surge in crypto remittances from family members abroad, providing much-needed support to those grappling with relentless inflation and supply shortages within the country.

In 2023, cryptocurrencies constituted 9% of the $5.4 billion in remittances sent to Venezuela, equating to $461 million. According to Chainalysis, remittances to Venezuela have consistently increased every year since 2018, with the exception of a decline in 2020.

Traditionally, remittances are sent via services such as Western Union. However, these services often become impractical for individuals in developing regions due to high fees, prolonged wait times, and currency supply issues, despite their robustness.

Venezuela’s Economic Catastrophe

Despite possessing the largest proven oil reserves globally, Venezuela’s economy remains beleaguered by persistent inflation, severe sanctions, supply chain disruptions, and governmental corruption.

In 2018, the Venezuelan government introduced a state-backed cryptocurrency named the “Petro” to circumvent U.S. sanctions targeting the energy-rich nation. Unfortunately, this cryptocurrency failed to achieve widespread acceptance due to perceived corruption and its lack of legal tender status within the country.

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Even Venezuela’s central bank rejected the Petro, and after six tumultuous years, it was discontinued in 2024. Nonetheless, the Venezuelan government continues to explore digital assets to evade U.S. sanctions.

Earlier this year, reports emerged suggesting that the Venezuelan government was considering the use of cryptocurrencies to facilitate international oil trade. In response, stablecoin issuer Tether announced the freezing of USDT assets held by Venezuela in compliance with U.S. sanctions.