Venezuela has increasingly turned to the use of USDT (Tether) as a mechanism to navigate the ongoing dollar shortage caused by U.S. sanctions, with limited banks now facilitating cryptocurrency exchanges for businesses. Since June 2025, the government has quietly allowed the use of Tether in private sector currency transactions, enabling businesses to bypass traditional foreign exchange channels. The shift is part of broader efforts to maintain economic operations despite restricted access to U.S. dollars, which had traditionally been sourced through oil exports. The U.S. Treasury imposed restrictions on oil exports earlier in the year, significantly limiting Venezuela’s dollar inflows and compounding the liquidity crisis in the country’s foreign exchange market. According to sources, companies now receive USDT in government-approved digital wallets, which can be used for both domestic and international payments. This strategy has allowed businesses to continue importing critical raw materials and maintaining production of essential goods like food. Local analyst firm Ecoanalítica reported that $119 million in cryptocurrencies were sold to the private sector in July 2025 alone, representing a significant portion of the $2 billion the central bank injected into the exchange market during the first seven months of the year. Meanwhile, the state-owned oil company PDVSA has been gradually shifting sales to USDT, further distancing the country from traditional banking systems affected by sanctions. However, the policy is not without its challenges. In mid-2024, Tether froze $5.2 million of USDT in 12 suspicious addresses linked to PDVSA, signaling potential regulatory and operational risks associated with the increased reliance on stablecoins. Despite these hurdles, the use of USDT remains a pragmatic solution for Venezuela’s liquidity constraints, offering a lifeline in a sanctions-stricken economy.

In a contrasting but related development, the Bank of England has signaled a more flexible regulatory approach toward systemic stablecoins, allowing these digital currencies to hold a portion of their backing assets in high-quality liquid assets such as short-dated government bonds. This shift marks a departure from the initial 2023 framework, which required stablecoin reserves to be held solely at the central bank and earned no interest, a model deemed unattractive for large-scale stablecoin issuers. Deputy Governor Sarah Breeden highlighted the change during a speech, explaining that the new approach addresses concerns from the industry about the viability of stablecoin business models. This adjustment aligns with the broader evolution of stablecoin use cases, which have expanded from retail payments to more complex financial applications such as the settlement of tokenized securities. The Bank of England has also emphasized the importance of central bank money in underpinning financial stability, especially in the context of tokenization and digital asset innovation. With the launch of the Real Time Gross Settlement (RT2) service, the central bank aims to modernize wholesale payment infrastructure to support a more interconnected financial system. Breeden also outlined the importance of a “multi-money” ecosystem, where different forms of money—including traditional bank deposits, stablecoins, and a potential digital pound—can coexist and interoperate. The central bank is actively exploring how to design regulatory frameworks that encourage innovation while ensuring robust financial stability and maintaining public trust in the value of money.

The Bank of England’s evolving stance on stablecoins reflects a growing global recognition of the role these digital assets can play in modern financial systems. Unlike traditional fiat currencies, stablecoins like USDT are designed to maintain a stable value by being backed by reserves such as fiat currencies or other assets. This feature makes them particularly appealing for cross-border transactions and settlements, where speed and cost-efficiency are crucial. The UK’s regulatory framework now allows systemic stablecoin issuers to diversify their reserve holdings, including in government-backed instruments, thereby enhancing their financial flexibility. This move is expected to encourage more institutional adoption of stablecoins and support their integration into broader financial markets. The central bank has also expanded the scope of its Digital Securities Sandbox to include stablecoins, acknowledging their potential in tokenized securities settlements. The sandbox provides a controlled environment for experimenting with digital asset innovations, helping regulators stay ahead of rapid developments in the sector. As stablecoins gain traction in both retail and institutional settings, their role as a bridge between traditional finance and decentralized systems is becoming more pronounced. The Bank of England’s approach, while cautious, demonstrates a willingness to adapt to the changing landscape and harness the benefits of innovation without compromising stability or public confidence in the monetary system.

The U.S. Federal Reserve is also stepping up its engagement with digital asset innovation, as evidenced by its upcoming Payments Innovation Conference, which aims to bring together industry leaders, regulators, and technologists to explore the future of financial systems. The conference, scheduled for October 21, 2025, reflects a growing consensus among central banks and regulatory bodies that stablecoins and other digital assets must be integrated into the broader financial ecosystem in a structured and secure manner. Federal Reserve Governor Christopher J. Waller emphasized that innovation in payments is not a new phenomenon but rather a continuous evolution, with digital assets now representing a significant chapter in this journey. The conference will cover a range of topics, including the integration of stablecoins into traditional finance, the role of AI in fraud detection and risk management, and the development of cross-border payment solutions. The event underscores the Federal Reserve’s recognition that digital assets are no longer a peripheral concern but a core component of modern financial infrastructure. This shift is also evident in the regulatory developments across the U.S., where agencies like the SEC and CFTC are working to establish clearer guidelines for digital asset markets. The broader implication of this growing engagement is the potential for a more resilient and inclusive financial system, where innovation is encouraged but remains grounded in stability and trust.

Despite the growing institutional interest in digital assets and stablecoins, the landscape remains complex and fragmented, with varying approaches across jurisdictions. While the Bank of England is moving toward a more flexible regulatory framework, the U.S. Federal Reserve is still in the process of evaluating the long-term implications of stablecoin adoption. This divergence highlights the challenges of aligning global financial systems with the rapid pace of technological change. For instance, the use of USDT in Venezuela to circumvent dollar shortages illustrates both the potential and the risks of relying on stablecoins in a sanctioned economy. On the other hand, the UK’s focus on integrating stablecoins into tokenized securities settlements suggests a more strategic and forward-looking approach. These differing paths underscore the need for a coordinated international effort to establish common standards and frameworks that can accommodate the evolving role of digital currencies in global finance. As central banks and regulators continue to refine their strategies, the ultimate goal is to create a regulatory environment that supports innovation while safeguarding financial stability and maintaining public trust in the monetary system.

Source: [1] Venezuelan Government Increases USDT Usage Due to … (https://finance.yahoo.com/news/venezuelan-government-increases-usdt-usage-005611230.html) [2] systemic stablecoins can hold ‘some’ government bonds … (https://www.ledgerinsights.com/bank-of-england-systemic-stablecoins-can-hold-some-government-bonds/) [3] Building trust and supporting innovation in the multi … (https://www.bankofengland.co.uk/speech/2025/september/sarah-breeden-keynote-speech-at-the-boe-and-warwick-business-school) [4] Fed’s Payments Innovation Conference Rallies Best Wallet … (https://disruptafrica.com/2025/09/04/feds-payments-innovation-conference-rallies-best-wallet-token/) [5] How to Buy Best Wallet Token (BEST) – Easy Guide (https://cryptonews.com/cryptocurrency/how-to-buy-best-token/)