Binance dollar gains ground in Venezuelan currency market

The Binance P2P platform has become a dominant force in Venezuela's foreign currency market, with daily transactions averaging $44 million. This figure, equivalent to 88% of the Venezuelan Central Bank's (BCV) foreign currency sales in June, underscores the significant limitations of the country's traditional exchange mechanisms.

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The results are surprising. Between June 11 and July 13, we estimate that at least 1,389 million USDT were traded, an average of nearly 44 million USDT daily.

According to a study by consulting firm Ecoanalítica, the USDT stablecoin, pegged 1:1 with the U.S. dollar, is the primary digital currency traded. The monthly volume on Binance in Venezuela now accounts for approximately 75% of the country's monthly oil export value. Economist Alejandro Grisanti noted that Binance has transitioned from a marginal market to a principal channel for buying and selling foreign currency.

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To put the figure in perspective, it is equivalent to 88% of all foreign currency sales made by the BCV (Central Bank of Venezuela) during June.

However, the formal exchange market is showing signs of normalization. Increased foreign currency supply from the BCV, more flexible exchange tables, and reduced market segmentation are contributing factors. Grisanti suggests that if this trend continues, the volume traded on Binance might gradually decrease. This would not be due to a drop in demand for foreign currency, but rather because more transactions could be facilitated through traditional banking channels.

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These numbers confirm that Binance has ceased to be a marginal market to become one of the main channels for buying and selling foreign currency in the country, reflecting the limitations that the traditional exchange market still presents.

Currently, the "Binance rate" serves as the main reference for the parallel dollar market in Venezuela. As of July 16, it was trading around 875.98 bolivars, approximately 20% higher than the official BCV rate of 727.45 bolivars. This gap illustrates the ongoing reliance on platforms like Binance for accessing dollars.

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In other words, if the process of exchange 'normalization' that we have been observing continues, we expect the volume traded on Binance to gradually decrease, not because the demand for foreign currency falls, but because a larger part of those operations can be carried out through traditional banking.