Venezuelans’ embrace of digital money is less a matter of choice than of necessity. Their own currency, the bolívar, is now about as valuable as Monopoly money, a casualty of mismanagement by Nicolás Maduro’s socialist government. Inflation is running above 4,000%, the largest currency note, the 50,000-bolívar bill, is equivalent to less than a dime, and a disastrous 15-year experiment with capital controls gave rise to a thriving black market for dollars.
Unlike in those other pariah states, digital dollarization via services such as Zelle has been able to take off in Venezuela because its citizens enjoy continued access to the U.S. financial system, says Darshak Dholakia, a partner at Dechert LLP in Washington, D.C., who advises companies on sanctions compliance. “Venezuela is in a very unique position of being the only country currently in which the government is subject to comprehensive sanctions but private people are not,” he says.