- Multiple economists have criticised the plan for limiting the country’s policy options and increasing dependence on the US.
CARACAS, (venezuelanalysis.com) – Venezuelan opposition lawmaker Antonio Ecarri has proposed dollarizing Venezuela’s economy and abolishing the bolívar, the country’s official currency, as a way to “stop devaluation” and “protect citizens’ purchasing power.”
Ecarri, a National Assembly Deputy from Alianza del Lápiz, has hired US economist Steve Hanke as an advisor for his plan to change the national currency.
“We are working on a serious dollarisation proposal to put the brakes on the infernal devaluation that is destroying people’s wages. Enough of bureaucracy financing public spending by confiscating the private property and labor of Venezuelans,” Ecarri said.
Hanke, a Johns Hopkins University academic who served in the Reagan administration, has advised countries such as Ecuador and Zimbabwe on similar initiatives. In an article for business magazine Fortune, he confirmed that he has already drafted “a bill for the Venezuelan parliament.”
According to the US economist, the transition would begin with the establishment of a fixed USD-bolívar exchange rate before converting bolívar-denominated accounts to US dollars. The Venezuelan Central Bank (BCV) would retain administrative functions but lose the ability to issue money or set interest rates.
Hanke previously revealed that he has held meetings with US Treasury and White House officials to discuss an international strategy aimed at strengthening the US currency through dollarisation of foreign countries, currency boards, and other instruments.
Ecarri’s proposal drew significant criticism, with Venezuelan National Assembly president Jorge Rodríguez announcing “an investigation process to establish the offenses committed” by the opposition lawmaker. Ecarri was also removed from his position as chairman of the Venezuela-US Parliamentary Friendship Group, a post he had held for just two months.
According to a published statement, the opposition deputy allegedly violated the legislature’s internal procedures as well as the constitutional provision establishing that “the monetary unit of the Bolivarian Republic of Venezuela is the bolívar” and that the central bank “is the public entity that, exclusively and mandatorily, exercises monetary policy.”
Rodríguez also described the proposal during a parliamentary session as “absurd and outrageous.” Ecarri, however, defended his stance and decision to hire Hanke, whom he called “an authority in the field and a personal adviser of mine for some time.”
The opposition lawmaker argues that Venezuela is “at a key moment” to debate the adoption of a different currency.
“The country is already de facto dollarized, but those who continue to receive their wages in bolívars that lose value every day are our teachers, nurses, workers, and pensioners,” he stressed. “The government itself has just approved a law allowing rents to be paid in foreign currency.”
Ecarri claimed that growing oil revenues would supply Venezuela with enough foreign currency to adopt the dollarisation plan, which he argued “should be accompanied by a Macroeconomic Stabilisation Fund to protect the value of the currency against potential external shocks in the United States.”
Since 2018, the Venezuelan government has tolerated the circulation of US dollars amid efforts to control inflation. Though the bolívar remains the official currency, businesses and retailers establish cost structures and prices using US dollars. Venezuelan authorities have also fixed monthly bonus payments, which constitute virtually the entire income for workers and pensioners, in dollars, which are then paid in bolívars using the exchange rate established daily by the BCV.
The central bank has continually devalued the bolívar, with the USD-bolívar exchange rate growing by more than 150 percent since the beginning of 2026. The currency depreciation is a key driver of inflation. Prices rose by 19.9 percent in July, and accumulated 12-month inflation presently stands at 576 percent.
Financial authorities have likewise been unable to control a parallel, speculation-driven exchange rate which currently stands 15-20 percent above the official one.
Despite the persistent devaluation-inflation issues, formal dollarization is opposed by most Venezuelan policy analysts, including government critics. Economist Asdrúbal Oliveros warned that dollarization would be an effective mechanism for drastically reducing inflation but “is not the best solution,” since it would be a “nearly irreversible” decision that would limit the country’s monetary policy options.
Right-wing economist José Guerra likewise considers dollarisation “a straitjacket” for an oil-producing country. “Without a central bank issuing currency, an external shock will cause deflation, an inability to pay salaries and finance public spending, as happens in Ecuador. It also creates a high dependence on the US and is a one-way path,” he said.
Rodrigo Cabezas, former finance minister under president Hugo Chávez, similarly expressed his “complete opposition” to dollarisation, stating that it is “unreasonable” for a country to surrender essential economic tools, losing control over foreign exchange policies and interest rates.
For his part, economist and former United Socialist Party (PSUV) legislator Tony Boza contended that Washington wants to push dollarisation in Latin America to “stave off its economic downfall.” Boza went on to criticise the acting Delcy Rodríguez government and the National Assembly for subordinating economic policies and the country’s national resources to US and foreign capital interests.