Venezuela Considers Formal Dollarization Amid Record Inflation

Venezuela is considering a move to formal dollarization, with economist Steve Hanke drafting a bill to abolish the bolivar. The National Assembly appointed him as a special adviser this month.

Hanke's plan would shut down the central bank entirely, ending the government's ability to print money. Inflation currently runs near 400% annually, still the highest rate in the world.

Venezuelans already live in a heavily dollarized economy in practice, with physical dollars circulating widely and digital alternatives like USDT becoming increasingly important for daily transactions.