Original Title: Tether Faces Its Euroclear Moment
Original Author: Izabella Kaminska
Translated by: Peggy, BlockBeats
Editor's Note: Tether's action to freeze approximately $182 million in USDT on the Tron blockchain has been viewed by some analysts as its "Euroclear moment." This refers to the moment when a financial infrastructure originally regarded as a neutral channel begins cooperating with law enforcement to freeze assets. At that point, it is no longer merely a stablecoin, but becomes part of the boundary of power.
This article starts with a discussion on the relevant fund dispute in Venezuela, exploring how this incident might impact USDT's narrative as an "alternative dollar" in the Global South and sanctioned regions, and how it could redefine the perception of risks associated with stablecoins.
The following is the original text:
The most significant news this week is that Tether froze approximately $182 million worth of USDT on the Tron blockchain within a single day, across five wallet addresses. This action is considered one of the largest single-day operations in Tether's history.
The assets in question are suspected to belong to the Venezuelan government, and Tether, long viewed as a "haven for illicit fund flows," is currently seizing (or freezing) sovereign assets at the request of the U.S. government.
What we can currently confirm is that this operation was indeed carried out under compliance and law enforcement procedures. Although the authorities have not officially confirmed that the addresses hold "Venezuelan oil revenue," analysts and blockchain observers generally make this association.
Online discussions also suggest that some of the frozen funds may overlap with wallet addresses used in Venezuelan-related activities. Considering the country's heavy reliance on USDT, this speculation is not without basis.
According to a report by The Wall Street Journal, Venezuela's oil trade has become deeply intertwined with the Tether stablecoin. The report cited a podcast by Venezuelan economist Asdrúbal Oliveros, who mentioned that stablecoins have created a "direct channel" between Venezuela's economy and the cryptocurrency world, with this connection primarily driven by the oil industry.
In the podcast, Oliveros pointed out that nearly 80% of the country's oil revenue is being collected in the form of cryptocurrency or stablecoins. He added that it is precisely this large inflow of digital assets that has made USDT a recurring keyword in commercial transactions and business operations in Venezuela.
However, Oliveros also emphasized that it is difficult for the government to convert these encrypted assets into liquidity usable by the real economy, as converting them into usable currency requires going through a series of compliance reviews. This has caused a large amount of capital to be "locked" on the blockchain. As a result, Venezuela's oil revenue has not flowed back into the domestic economy, affecting the official exchange rate and causing it to soar.
Oliveros also implied that the Venezuelan government has not demonstrated professionalism in managing its cryptocurrency and stablecoin assets. He pointed out that due to excessive reliance on individual wallets, lack of internal compliance procedures, and absence of regular reconciliation mechanisms, some wallet mnemonics/keys may have been mishandled or even lost amid poor management.
Survivability issues?
If it is ultimately confirmed that the frozen funds indeed belong to Venezuela, the key question everyone will be concerned about is: how will this impact Tether's reputation as an "alternative monetary system" in developing countries, especially in regions experiencing financial instability or facing international sanctions?
On Tuesday, at the launch event for Bytetree's new Bitcoin + Gold combined exposure ETN product BOLD at the London Stock Exchange, prominent figures from London's crypto and gold investment circles speculated that this event could have a significant impact on stablecoins, potentially affecting much more than just that sector.
Dominic Frisby, a Bitcoin investor, advocate, and comedian (and also an active supporter of digital privacy), told The Peg that he was not surprised that this incident would cause panic in the crypto capital, just as the previous discussions about the "official seizure of Russian assets held in Euroclear" unsettled international sovereign investors regarding assets denominated in euros or U.S. dollars.
Although Tether is often described by outsiders as "unregulated, high-risk, and non-compliant," over the past year, the stablecoin giant has not hidden its increasingly close cooperation with global law enforcement agencies, even though it still maintains its base in El Salvador, a country known for its relatively lenient regulations and crypto-friendly environment.
Tether CEO Paolo Ardoino told The Peg in October that Tether is the only stablecoin and cryptocurrency company that regularly collaborates with the U.S. Department of Justice (DoJ), and has also included the FBI and the U.S. Secret Service in its cooperation framework.
"We froze Garantex's (Russian exchange) assets together with them." While confirming this action, he also stated that Tether is expanding its presence in the commodity-related supply chain financial market.
According to the Wall Street Journal, blockchain monitoring company TRM Labs has partnered with Tether to help track illegal activities involving USDT on the Tron blockchain. Ari Redbord, TRM Labs' global policy lead, told the media that stablecoins play a complex role in Venezuelan society: "They (stablecoins) can be a lifeline for civilians, but under sanctions pressure, they can also become tools for evasion."
This statement highlights a core reality: USDT, as a financial lifeline, has become deeply embedded in Venezuela's economy, helping ordinary people combat hyperinflation. At the same time, however, its technology can also be exploited by bad actors to move funds, raising concerns regarding sanctions compliance.
However, Tether has now demonstrated that it is also willing to freeze USDT on networks like TRON when addresses are flagged for sanctions or illegal associations. In other words, even if stablecoins play a critical role as financial infrastructure locally, they are not exempt from "human enforcement."
More importantly, this action took place after a recent policy "急刹车" (sudden halt) in Brussels (the EU). After years of posturing, planning, and legal preparations, the EU ultimately hesitated at the final step of "explicitly seizing Russia's frozen assets," due to concerns that it might weaken the attractiveness of euro assets to international investors.
Therefore, the message the market and various countries receive may be that putting money into stablecoins like Tether could be riskier than holding official assets.
It remains to be seen whether this reality will pose a "survival threat" to Tether's offshore business model in the coming weeks or months. However, within the crypto community, a strong sentiment is spreading: international investors may never view stablecoins in the same way they did before.
At the very least, this incident demonstrates that the influence of the so-called "Donroe Doctrine" has extended beyond geopolitics and state-level competition, and is now entering the core of global financial markets. From any perspective, Tether is at the very center of this sphere of influence.
So far, Tether's peg has remained stable, except for a slight fluctuation over the past month. A real sign of pressure would be a significant slowdown in inflows—or, more dangerously, a shift from net inflows to net outflows.
Tether's next reserve attestation is expected to be released in late January or early February.
Tether (USDT) to the U.S. Dollar (USD)
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