{"id":5808,"date":"2026-08-23T09:38:06","date_gmt":"2026-08-23T09:38:06","guid":{"rendered":"https:\/\/crosscountrymovingteams.com\/?p=5808"},"modified":"2026-08-23T09:38:06","modified_gmt":"2026-08-23T09:38:06","slug":"venezuela-abandoning-the-bolivar-and-adopting-the-u-s-dollar-would-be-the-biggest-currency-switch-since-the-advent-of-the-euro-hanke-says","status":"publish","type":"post","link":"https:\/\/crosscountrymovingteams.com\/?p=5808","title":{"rendered":"Venezuela abandoning the bolivar and adopting the U.S. dollar would be the biggest currency switch since the advent of the euro, Hanke says"},"content":{"rendered":"
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The professor of applied economics at Johns Hopkins University is now helping Venezuela and has been named a special advisor to the country\u2019s National Assembly.<\/p>\n

Read more OTC Markets CEO: 250 years of market history just collided with a new SEC rule<\/a><\/p>\n

He told Fortune\u2019s<\/em> Shawn Tully that his solution for Venezuela\u2019s 400% inflation is full adoption of the U.S. dollar, meaning bolivars and the central bank would be abandoned. The idea is to remove the risk of a central bank printing money to help the government pay its bills, stoking higher prices.<\/p>\n

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\u201cTaming inflation is the key to restoring stability in Venezuela, and all the other progress flows from that,\u201d Hanke explained. \u201cStability isn\u2019t everything, but without stability, which means stable prices, you have nothing. And there\u2019s no better case study showing that\u2019s true than Venezuela.\u201d\u00a0<\/p>\n

He should know. The Money Doctor persuaded Montenegro in 1999 to dump theYugoslav dinar for the Deutschemark. He also oversaw Ecuador\u2019s switch from the sucre to the U.S. dollar in 2000, marking the first dollarization in Latin America since Panama a century earlier. <\/p>\n

Then in 2009, Hanke became an informal advisor to the prime minister of Zimbabwe, which dollarized and reined in inflation. But a new government ditched the dollar in 2013, and hyperinflation returned.<\/p>\n

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Hanke is now on his second attempt in Venezuela, after his plan for a currency board in the mid-1990s failed to win a majority in the National Assembly. This time, he sees 50%-80% odds that dollarization will be approved.<\/p>\n

\u201cIt would be the biggest switch from domestic currencies to an alternative since the introduction of the euro in 1999,\u201d he told Fortune\u2019s<\/em> Tully.<\/p>\n

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Despite the ambitious plans, the U.S. dollar is already in integral part of the Venezuelan economy. Due to the collapsing bolivar, which has tanked 78% against the greenback over the past year alone, most consumers buy virtually everything with dollars.<\/p>\n

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In fact, almost everyone not working for the government or receiving aid and pensions from the government uses dollars. Hanke said this \u201cspontaneous dollarization\u201d raises the chances of an official currency switch. <\/p>\n

Read more American billionaires are showing off their farmland for elaborate hobbies, but a buying spree among the ultrarich risks pricing farmers out<\/a><\/p>\n

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But the prospect of losing the central bank, which acts as a lender of last resort, and essentially handing over monetary policy to the Federal Reserve are still daunting obstacles. <\/p>\n

Even Argentine President Javier Milei, who campaigned on dollarization, backed off the idea after he took office. While he helped cool inflation sharply by slashing subsidies and the budget deficit, the annual rate is still high.<\/p>\n

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Argentina must also continue defending the peso, which is pegged to the dollar. Regional elections last year that crushed Milei\u2019s party sent the peso into a tailspin, and Treasury Secretary\u00a0Scott Bessent came to the rescue with a currency swap line.<\/p>\n

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Still, Hanke sees dollarization as the key to unlocking Venezuela\u2019s economy, which is highly dependent on oil exports. A currency switch would induce a big surge of foreign investment into the oil sector, he predicted.<\/p>\n

Then there\u2019s the $250 billion in Venezuelan debt, which is equivalent to about 150% of GDP. Hanke said increased production would provide the dollars needed to pay the principal and interest.<\/p>\n

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The end of hyperinflation would also lower interest rates, encouraging a wave of borrowing by consumers and businesses. That would in turn ignite the housing market and drive domestic investment, he added.<\/p>\n

\u201cIf it happens soon, Venezuela would take off from negative growth this year to positive growth next year,\u201d Hanke said.<\/p>\n

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“Taming inflation is the key to restoring stability in Venezuela, and all the other progress flows from that.”<\/p>\n","protected":false},"author":1,"featured_media":5807,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[399],"tags":[],"class_list":["post-5808","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-currency"],"yoast_head":"\nVenezuela abandoning the bolivar and adopting the U.S. dollar would be the biggest currency switch since the advent of the euro, Hanke says - Cross Country Moving Team<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/crosscountrymovingteams.com\/?p=5808\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Venezuela abandoning the bolivar and adopting the U.S. dollar would be the biggest currency switch since the advent of the euro, Hanke says - 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