[REVISION HISTORY]

Venezuela monetary reform and dollarization debate

Updated 3 times since CLSTR started tracking revisions of this situation.

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2026-08-26 04:34 UTC → 2026-08-26 12:54 UTC · added ~~removed~~

Economist Steve Hanke has drafted a legislative proposal to dollarize Venezuela’s economy, aiming to replace the bolívar with the U.S. dollar and abolish the Central Bank of Venezuela to combat hyperinflation, which is currently estimated at 400% annually. Deputy Antonio Ecarri confirmed he is working with Hanke on a personal basis through his team, the Diputación Nacional del Lápiz, to protect workers' purchasing power and close the exchange rate gap. However, National Assembly President Jorge Rodríguez denied that the legislature officially hired Hanke, calling such reports “absolutely false” and “absurd.” Following these developments, the National Assembly dismissed Ecarri from his role as president of the Parliamentary Friendship Group with the United States. Rodríguez characterized Ecarri’s discussions as “irresponsible” and a violation of the constitution, specifically citing Article 318, which establishes the bolívar as the national currency and grants the Central Bank exclusive authority over monetary policy. An investigation has been launched to determine legal responsibilities and potential further sanctions. Regarding the proposal, Hanke—a Johns Hopkins professor known as ‘Doctor Money’—suggests a version where the Central Bank of Venezuela remains but loses its authority to execute discretionary monetary policies. Hanke maintains the plan is compatible with the Venezuelan Constitution and estimates a 50% to 80% chance of approval. Amid the ongoing investigation, Ecarri has defended his actions, ~~stating he was elected to propose solutions to poverty and inflation rather than~~ arguing that dollarization is necessary to ~~simply follow party lines. Some economic analysts have questioned~~ prevent the ~~viability~~ Central Bank from confiscating the value of ~~full dollarization, citing labor law requirements~~ citizens' earnings. He noted that while many transactions are already conducted in foreign currencies, public sector workers like teachers and police continue to be paid in devalued bolivars. Ecarri suggested the ~~country's dependence on~~ country has sufficient reserves due to increased oil ~~revenue.~~ production and proposed a Macroeconomic Stabilization Fund to mitigate external shocks. He intends to seek citizen support to transform the initiative into a formal legislative proposal.

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