exchangerate.devThe headline has moved faster than the policy. Antonio Ecarri wants Venezuela to replace the bolívar with the US dollar, but this remains his parliamentary team's initiative. No law, official conversion rate, or start date has been adopted.
- Ecarri and Hanke are drafting full dollarization, but Venezuela's legislature and government have not adopted it.
- The August 24 official rate was 784.6633 bolívares per dollar, leaving the bolívar 61.6% weaker in dollar terms than in January.
- Dollars are widely used, but Article 318 still defines the bolívar as Venezuela's monetary unit.
- Dollarization stops new bolívar creation but gives up independent monetary policy and limits emergency bank support.
What was actually proposed
Ecarri’s parliamentary team describes this as its legislative initiative; National Assembly president Jorge Rodríguez denied hiring Hanke.
Venezuela is already partly dollarized. Shops, savers, and private employers often use dollars as the bolívar loses purchasing power. Full dollarization would also move wages, deposits, contracts, taxes, and public accounts to dollars under a transition law.
Why the proposal has returned
The official rate moved from 301.37 bolívares per dollar near the start of 2026 to 784.6633 on August 24, a 61.6% loss in the bolívar's dollar value. The central bank also reported 90% cumulative inflation from January through April, according to Venezuela’s central bank. Stop issuing bolívares, and one direct source of depreciation disappears.
What a real conversion would require
- Set the rate for cash, bank balances, wages, pensions, debts, and contracts.
- Choose when accounts and prices change to dollars.
- Supply enough dollar notes and liquid bank reserves.
- Replace the central bank's emergency support for banks.
- Fund deficits without issuing a domestic currency.
Hanke proposes abolishing both the bolívar and the central bank. Those are separate choices: Ecuador adopted the dollar in 2000 but retained a limited central bank. Venezuela also faces Article 318 of its constitution, which names the bolívar and assigns monetary powers to the central bank. A complete switch may therefore require constitutional change.
| Bolívar amount | Calculation | USD at Aug 24 rate |
|---|---|---|
| Bs. 1,000 | 1,000 / 784.6633 | $1.27 |
| Bs. 10,000 | 10,000 / 784.6633 | $12.74 |
| Bs. 100,000 | 100,000 / 784.6633 | $127.44 |
Dollarization can curb monetary financing and remove bolívar-dollar risk from converted contracts. It also hands monetary policy to the US Federal Reserve, ends income from issuing currency, and limits emergency support for banks. The IMF's assessment is blunt: credibility helps, but it cannot replace sound budgets, reserves, and bank safeguards.