Venezuela: Currency & Financial System

Venezuela's currency, the bolivar, has undergone three major redenominations in response to runaway inflation. The bolivar fuerte replaced the original bolivar on January 1, 2008, at a rate of 1,000 to 1. The bolivar soberano then replaced the bolivar fuerte on August 20, 2018, at a rate of 100,000 to 1. A third redenomination followed on October 1, 2021, when the bolivar digital replaced the bolivar soberano at a rate of 1,000,000 to 1. Each change dropped zeros from the currency without resolving the underlying inflation that made the changes necessary.

The Banco Central de Venezuela (BCV) is the country's central bank, responsible for issuing banknotes and publishing the official bolivar-to-dollar exchange rate used for many formal transactions. The BCV's credibility has been strained by periods of limited transparency; it stopped publishing key economic statistics in 2014 and did not resume regular releases until 2019. As of September 2026, the BCV's official exchange rate stood at roughly 800 bolivares per U.S. dollar, after the currency lost more than half its value against the dollar in the first half of 2026, prompting the bank to sell billions of dollars from reserves to slow the decline.

Years of hyperinflation have pushed much of Venezuela's economy toward informal dollarization, with U.S. dollars commonly used alongside bolivares in everyday transactions, particularly outside tourist areas. As of October 2026, the government has not adopted the U.S. dollar as official legal tender, and Venezuelan officials remain divided on the question: proposals for formal dollarization, including a plan associated with American economist Steve Hanke, have drawn both support and public opposition from senior figures, and no formal dollarization law had been enacted as of this writing. The bolivar therefore continues to serve as the country's legal currency even as dollars circulate widely in practice.