Iran and Venezuela cases reveal the practical uses of stablecoins, with Tether becoming a key tool

In early 2026, Venezuela and Iran successively fell into new political and economic turmoil, and the practical use cases of stablecoins in both countries once again attracted widespread attention. Fiat-pegged stablecoins, especially Tether (USDT), on one hand, became an important tool for ordinary people to combat inflation and avoid financial system risks; on the other hand, they were also used by sanctioned entities for cross-border fund transfers, highlighting the dual nature of stablecoins that is difficult to avoid.

In Iran, as the economy continued to deteriorate and the Iranian Rial to US Dollar exchange rate plummeted to historic lows, large-scale protests erupted in many parts of the country. The government temporarily cut off internet access amid tense situations, exacerbating the instability of the financial system. Against this backdrop, cryptocurrencies and stablecoins gradually became vital means for the public to preserve purchasing power, with USDT issued on the Tron network being widely used for value storage and transaction settlement.

However, the Iranian government’s attitude toward stablecoins has become more restrictive. In 2025, the country set annual and single transaction limits on stablecoins, and some USDT addresses were blacklisted due to security and compliance issues, reducing their circulation efficiency. Meanwhile, blockchain analytics firm TRM Labs disclosed that since 2023, the Islamic Revolutionary Guard Corps (IRGC) transferred over $1 billion worth of stablecoins through multiple overseas shell companies to evade international sanctions. This phenomenon has also made the role of stablecoins in geopolitical contexts more complex.

Similar situations also occurred in Venezuela. Due to long-term significant devaluation of the local currency and damage to the banking system’s credit, USDT was extensively used for daily payments and commercial settlements locally. Venezuelans prefer using digital wallets over traditional bank accounts, and the penetration of stablecoins into the real economy continues to rise. Notably, Venezuela’s state-owned oil company was reported to use USDT extensively for international settlements to bypass sanctions imposed since 2020.

In response to the risk of stablecoins being used to evade sanctions, Tether has continued to strengthen compliance cooperation in recent years. Public data shows that between 2023 and 2025, Tether froze several billion dollars worth of USDT assets, a significant portion of which came from the Tron network. After 2026, related freezing actions are still ongoing, reflecting the issuer’s attempt to balance regulatory pressure and market demand.

Overall, the practical application of Tether in Venezuela and Iran clearly demonstrates the duality of stablecoins: they are both a financial alternative in environments of economic disorder and a gray tool within the sanctions system. This reality is prompting global regulators to reevaluate the positioning and boundaries of stablecoins within the international financial system.