Economist Steve Hanke has drafted a full dollarization law aimed at abolishing the Venezuelan bolivar and the central bank. The National Assembly appointed Hanke as a special adviser this month to work alongside Assembly member Antonio Ecarri, founder of the centrist Lápiz party, on the legislative proposal.
Hanke places the odds of the bill passing between 50% and 80%. This marks his second attempt at pursuing dollarization in the country, having previously designed a currency board in 1995 and 1996 as chief economic adviser to President Rafael Caldera. Supporters of the current plan argue that conditions have shifted, pointing to surveys indicating that most Venezuelans already favor abandoning the bolivar and frequently shop in dollars.
Annual inflation in Venezuela currently sits near 400%, maintaining the highest rate globally despite easing from previous levels before the capture of Nicolás Maduro. Hanke's proposed legislation would shut down the central bank entirely to strip the government of its money-printing capabilities. Meanwhile, Venezuela's oil production remains at approximately 1.1 million barrels per day, and external debt sits near $250 billion, equivalent to roughly 150% of GDP.
The Role of USDT and Crypto in Venezuela
While physical dollars circulate widely, digital alternatives have taken a central role in daily commerce. Retail crypto volume in Venezuela reached $17.9 billion in the first quarter of 2026, according to TRM Labs data. Tether (USDT) dominated the market, accounting for 90.2% of all Binance peer-to-peer listings paired with the bolivar.
On peer-to-peer platforms, USDT trades near 919 bolivars, compared to the official Central Bank rate of around 780 bolivars, creating a gap of nearly 18%. For many citizens, stablecoins serve as a practical survival tool to protect purchasing power against rapid inflation rather than a speculative asset.
If formal dollarization succeeds under the proposed plans, the necessity of using crypto strictly as an inflation hedge could decline over the long term. However, the speed, low remittance costs, and availability of digital-dollar infrastructure built around stablecoins are expected to remain embedded in the local economy.
