USDT premium soars in Venezuela’s P2P market as bolivar weakness deepens

Venezuelans are quickly turning to USDT as an alternative to retain purchasing power amid their local currency’s continued decline. The Venezuelans have reportedly turned to Binance’s P2P market to obtain USDT as an alternative currency. Data shows that USDT rose over 16% on Venezuela’s Binance p2p marketplace, moving from roughly 690 to prices above 800 bolivars. 

The data is tracked by p2p.Army shows that the bolivar/USDT rate has been rising steadily between mid-May and mid-June this year. At some point, the rate has topped 800 bolivars, mostly on Binance, which is by far the largest p2p market in Venezuela.

Although the USDT value remained pegged at 1:1 with the dollar, price fluctuations resulted from a weakening local currency. There is a huge shortage of USD in Venezuela, and therefore, most small and local businesses are competing for dollars, despite the widening gap between the number of bolivars in circulation and the number of dollars available in the formal banking system for distribution. 

Venezuelan bolivars are piling up faster than the dollar

Recently, the Central Bank of Venezuela (BCV) reported bolivars circulating in the economy hit approximately 2.17 trillion in the week ending June 5th. The rise represents 23% growth from the 1.76 trillion recorded previously in May. Bolivar supply rose by 131%, outpacing USDT growth by over 100% year to date. 

Crypto analyst Hever Castro pointed out on X that the USD available through the BCV and bank trading desks couldn’t keep pace with rising demand. As a result, locals turned to USDT marketplaces for alternatives to protect their purchasing power as the bolivar continued losing value. 

In this scenario, banks typically shut down their digital dollar-sale systems the moment daily quotas run out. The banks usually lock everyday buyers out of the formal market, leaving unconventional markets such as Binance p2p as the next stop for anyone trying to protect their savings.

Economists argue against BCV’s countermeasures

On June 15th, the BCV consequently capped the amount of dollars an individual can buy through the banking system at $ 1,000 per month. The regulator also capped the yearly limit at $12000 and limited electronic transactions to $500 a week. 

Economists have criticized the BCV’s move, claiming it is a sign of a struggling economy and that the measures put more pressure on the economy rather than alleviating pressure. One economist, Asdrúbal Oliveros, argued that the measures put in place by the BCV will only put more pressure on the parallel P2P market that is now dominated by Binance P2P. 

As of the time of writing, the BCV rate of exchange is approximately 590 bolivars for a USD. However, considering the significant shortage of the USD, the gap is visible and much wider on p2p markets, with the spread between the two currencies sitting close to 35%. Some local outlets have reported that independent, informal vendors in Caracas are already setting exchange rates as high as 1200 bolivars per dollar. If these, the regulator risks losing relevance as the informal sector continues to undermine set rates and citizens start pricing goods and services differently based on supply and demand. 

Over the years, Venezuelans have alternated between bolivars, dollars, and crypto. There’s a popular arbitrage opportunity in the local market, often referred to as “bicicleta cambiaria.” This is where locals mainly purchase dollars from banks and resell them at a premium on p2p platforms. 

The new dollar caps appear aimed squarely at that loop, but tightening the formal side without expanding the dollar supply tends to do the opposite of what regulators intend: it pushes more bolivars, and more people, straight toward the P2P market they were trying to ease pressure from in the first place.

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