Venezuela Dollarization Bill Drafted by US Economist Steve Hanke
Venezuela · ECONOMY
Key Facts
- —What happened Economist Steve Hanke drafted a Venezuela dollarization bill with deputy Antonio Ecarri, reported 20 August 2026.
- —How big The bill would replace the bolívar with the US dollar and abolish the central bank’s monetary powers.
- —The catch This is a draft from outside government, with no official adoption or timetable from Caracas.
- —Who pays The plan would end the government’s ability to issue new money, shifting economic control to the dollar.
- —What comes next No formal recipient or legislative timeline has been disclosed, so the draft’s future is uncertain.
A drafted bill from outside government proposes replacing the bolívar with the dollar, but Caracas has not signed on.
US economist Steve Hanke has drafted a bill to dollarize Venezuela’s economy. It would replace the bolívar with the US dollar and shut down the central bank. Fortune and Guacamaya reported on 20 August 2026 that Hanke worked with Venezuelan deputy Antonio Ecarri on the proposal.
Who Is Behind the Proposal
Steve Hanke is a well-known US economist who has advised governments on currency reform for decades. He worked with Antonio Ecarri, a Venezuelan deputy and former presidential candidate, on the draft.
Hanke was named a special adviser on economic affairs to a leader in Venezuela’s National Assembly, Fortune reported on 20 August 2026. Guacamaya also reported the same day that Hanke drafted a bill to replace the bolívar with the dollar.
The proposal would shut down the Banco Central de Venezuela, known as the BCV, ending its role in monetary policy. This move aims to stop the government from issuing new money and manipulating interest rates.
Hanke’s involvement is notable because he is known as the ‘money doctor’ for fixing hyperinflation crises in other countries. His plan for Venezuela dollarization is his latest attempt to apply that approach in Latin America.
What the Bill Would Do
The drafted law would replace Venezuela’s bolívar with the US dollar as the official currency. This would require abolishing or shutting down the BCV, according to the reports.
Ending the central bank would remove the government’s ability to print money and set interest rates. The goal is to stabilize prices and restore confidence in the economy.
Dollarization means all transactions, wages, and savings would be in US dollars, not bolívares. This change could affect millions of Venezuelans who currently use both currencies informally.
The bill does not specify a transition period or how to handle existing bolívar assets, according to the reports. Such details would be crucial for a smooth changeover if the plan moves forward.
The Political Context in Venezuela
Venezuela’s government has not endorsed the draft bill, and there is no formal adoption date. The proposal comes from outside the government, making its path uncertain.
The National Assembly leader who received Hanke’s advice has not commented publicly on the bill. Political support would be needed for any change to the currency system.
Ecarri, who worked with Hanke, is an opposition figure, not a ruling party member. This suggests the bill may face resistance from the current administration.
No official timetable has been published for considering the draft in the assembly. The Venezuela dollarization idea remains a proposal, not a policy.
Economic Indicators Behind the Push
Venezuela’s economy has shown some growth, with non-oil exports up 32% in the first quarter of 2026. The central bank reported 7.14% GDP growth for the second quarter of 2026 on 18 August.
These figures come from the Ministerio de Comercio Exterior and the BCV, respectively. They suggest some recovery, but hyperinflation has been a long-term problem.
The central bank’s own data shows growth, but dollarization advocates argue that currency stability is needed. Hanke’s plan aims to lock in that stability by removing local money.
Oil revenue remains a key factor, with PDVSA billing US$15.9 billion from January to July 2026. This context shows the economy’s reliance on dollar-denominated exports.
Oil Revenue and US Custody
PDVSA, Venezuela’s state oil company, billed US$15.9 billion in the first seven months of 2026. A report from Bitácora Económica on 23 August 2026 said more than half is held by the United States.
The revenue is deposited in a custody account at the US Treasury Department, according to the same report. This arrangement stems from US sanctions and debt negotiations.
No public register details the exact share held by the US, and the precise mechanism remains unclear. The lack of transparency adds complexity to any economic plan.
This custody situation means Venezuela‘s oil income is partly controlled by Washington. Dollarization would not change this, as the US already influences dollar flows.
Challenges to Implementation
Replacing the bolívar with the dollar would require a massive logistical effort, including exchanging cash and updating contracts. The central bank would need to be dismantled, which is a political headache.
Venezuela has used the dollar informally for years, but formal dollarization is a different matter. It would tie the economy to US monetary policy, which Venezuela cannot control.
The sitting government has not endorsed the bill, so it lacks the political will to move forward. Any change would need approval from the national assembly and president.
No timeline has been published for debating the draft, so it may remain a paper proposal. The Venezuela dollarization plan faces uncertain odds without official backing.
Historical Precedents and Risks
Hanke has advised countries like Ecuador and El Salvador on dollarization, which they adopted in the 2000s. Those cases show both benefits and risks, such as losing control of monetary policy.
In Ecuador, dollarization ended hyperinflation but limited the government’s ability to respond to crises. Venezuela’s situation is different because of its oil wealth and sanctions.
The central bank’s shutdown would mean no lender of last resort for banks in a crisis. This risk is a key concern for economists who study dollarization.
Hanke’s plan does not address how to handle the US custody of oil revenue, which complicates the picture. The draft focuses on currency, not external creditors.
What Happens Next
The draft bill has been reported by media, but no official action has been taken in Venezuela. The sitting government has not confirmed any plan to adopt the proposal.
Ecarri and Hanke have not disclosed a formal recipient or legislative timeline. Without this, the Venezuela dollarization bill remains a draft.
Observers will watch for any response from the National Assembly or the government. A public statement could signal whether the idea gains traction.
If adopted, the change would be historic, but that remains unlikely in the short term. For now, the bolívar stays, and the plan is just a proposal.
Frequently Asked Questions
What is the Venezuela dollarization bill?
It is a draft law to replace the bolívar with the US dollar and shut down Venezuela’s central bank. The draft was reported on 20 August 2026.
Who supports the bill?
Hanke worked with deputy Antonio Ecarri on the draft. No Venezuelan government official has endorsed it publicly.
Is the bill official government policy?
No, it is a proposal from outside the government with no adoption or timetable. The sitting government has not commented.
What would happen to the central bank under dollarization?
The bill would abolish the Banco Central de Venezuela, ending its ability to print money and set interest rates. That would shift monetary control to the US Federal Reserve.
Could this plan actually happen?
It is unclear, as the government has not endorsed it. Historical precedents like Ecuador show it is possible but politically difficult.
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