Venezuela considers official dollarization of its economy

Venezuela has been running a quiet experiment in dollarization for years. Since roughly 2018 and 2019, the US dollar has functioned as the country’s real currency, filling the void left by a bolívar so battered by inflation it barely registers as money. Now, a formal proposal to make that reality official is forcing a political reckoning.

As of mid-September 2026, opposition lawmaker Antonio Ecarri pushed a dollarization bill through public debate, only to see it blocked by the Chavismo-aligned national assembly on constitutional grounds. The proposal, backed analytically by economist Steve Hanke, would replace the bolívar entirely with the US dollar.

A country already living in dollars

Approximately 65% of retail transactions in Venezuela are conducted in US dollars as of 2026, meaning formal dollarization would largely ratify what shopkeepers, landlords, and street vendors already figured out on their own.

Inflation reached 576% year-on-year by July 2026, a number that sounds abstract until you consider what it means in practice: prices doubling and tripling within months, savings evaporating, and any salary denominated in bolívares losing value before it clears the bank.

A May 2026 survey found that more than 50% of Venezuelans favored formal dollarization as a way to stabilize prices.

Business groups are taking a more cautious position. ANCE and Consecomercio, two prominent commercial associations, have floated a bimonetary system as an alternative: keep the bolívar in circulation alongside the dollar and other currencies, preserving some degree of monetary sovereignty without committing fully to a US-pegged framework.

Why formal dollarization would change things

When a country formally adopts the dollar, it surrenders its ability to print money entirely. That removes the central bank’s capacity to inflate its way out of fiscal problems, which is precisely what Venezuela has been doing for years.

Ecuador formalized dollarization in 2000 and saw inflation drop sharply within a few years. El Salvador, which has used the dollar alongside Bitcoin since 2001, offers a more recent case study in how full adoption reshapes monetary expectations.

For foreign investors, formal dollarization would reduce one major layer of risk. Right now, any investment in Venezuelan assets carries the implicit threat of bolívar devaluation wiping out returns in dollar terms.

The Maduro-aligned legislature’s constitutional objection is not merely procedural. Control over monetary policy is a core instrument of political power, and giving it up means giving up the ability to finance government spending through currency creation.

Where crypto and stablecoins fit into the picture

When a national currency loses value at 576% annually, people look for alternatives. For Venezuelans without easy access to physical US dollars, dollar-denominated stablecoins have served a similar function: a store of value that holds purchasing power across days, weeks, and months in a way the bolívar cannot. Platforms facilitating peer-to-peer USDT and USDC transactions have found real demand in the country precisely because the formal banking system has struggled to deliver dollar access at scale.

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