Nicholas Snyder has argued that Venezuela’s switch to the dollar as its official currency would be the fastest way to restore the country’s economy. He emphasized that while dollarization alone cannot fully revive Venezuela, it offers the most immediate solution to the nation’s currency crisis.
According to Snyder, abandoning the national currency would stop income depreciation and reduce inflation. Switching to the dollar would also eliminate exchange rate fluctuations, lower borrowing costs, and create conditions for attracting investments.
Snyder recommended passing legislation granting the dollar legal tender status, after which it should set a conversion rate for the old currency and transfer the financial system to a new basis. He noted that the dollar is already in use in Venezuela since 2019 due to hyperinflation and shortages, but official dollarization would expand this practice and return trade to the formal economy.
Snyder cited Panama, Ecuador, and El Salvador as examples where the transition to the dollar contributed to economic stability. At the same time, other reforms will be required to restore Venezuela.
