Venezuela will, once again, change the face value of banknotes and coins in circulation, after two attempts of redenomination by previous presidents. The authorities will also launch into circulation a central bank digital currency. Bearing the name “digital bolivar”, this CBDC will be officially launched on October 1st.
The nation is currently in a state of severe hyperinflation accommodated by economic and social unrest. In 2018 the inflation increased by 1.8 million percent. In 2019 the country experienced inflation by 9 500% percent, and 3000% in 2020.
The Central Bank of Venezuela will adjust 6 zero’s to the inflated bolivar. It will launch a one bolivar coin, as well as banknotes between 5 bolivars and 100.
The current President, Maduro, revealed last February his plan to launch a CBDC, with plans to digitize the Venezuelan economy by December 31st 2021. One notable claim that stuck was his assumption that the economy was already 77% digitized already.
The digital bolivar will use an SMS-based exchange, used for peer-to-peer transactions. The country’s central bank also noted that the introduction of a central bank digital currency will not affect the bolivar value.
Meanwhile, the situation in Venezuela is still not looking too good. The local currency is defaced to the point that the economy is currently running, mostly, on US dollars.
