Venezuelan opposition deputy Antonio Ecarri, representing the Alianza del Lápiz party, has introduced a legislative proposal to replace the bolívar with the US dollar as the official national currency. He developed the initiative in collaboration with Johns Hopkins economist Steve Hanke.
The proposal aims to eliminate discretionary monetary policy while maintaining central bank autonomy. This move follows private estimates indicating that annual inflation in Venezuela has exceeded 500%. The country previously conducted monetary conversions in 2008, 2018, and 2021.
In late August, the ruling Chavismo bloc initiated a parliamentary investigation into Ecarri and removed him from his position as president of the Venezuela-United States Parliamentary Friendship Group following his announcement of the dollarization plan.
While the economy has undergone de facto dollarization since approximately 2018, with widespread use of the US dollar for rent and retail, cryptocurrencies and stablecoins currently serve as essential tools for remittances and cross-border payments.
Critics of the formal proposal highlight risks such as the loss of monetary sovereignty and potential economic contraction due to the inability to devalue the currency during commodity price downturns. They point to the reliance of the economy on oil exports.
