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Venezuela will eliminate six zeros from its currency and announced the implementation of the digital bolivar

2021-08-05T14:02:21.325Z


It will live with the physical bolivar currently in use, which will have bills of 5, 10, 20, 50 and 100.


08/05/2021 10:52

  • Clarín.com

  • World

Updated 08/05/2021 10:52

Venezuela ordered a new monetary reconversion, the third of this century, which will 

eliminate six zeros from the bolivar

, the local currency hit by high inflation and whose value has plummeted, giving way to the use of the dollar.

In turn, the Central Bank announced this Thursday that it will implement a new currency,

known as the digital bolivar

.

"As of October 1, 2021,

the Digital Bolívar will come into effect

, by applying a monetary scale that removes six (6) zeros to the national currency. That is, all monetary amounts and everything expressed in national currency will be divided between one million (1,000,000), "the banking entity reported in a statement. 

In 2007, Venezuela underwent a first reconversion process by eliminating three zeros from the currency that

became the bolívar fuerte

.

In 2018, there was another process that ended with the birth of the current sovereign bolivar, which removed another eight zeros from the currency.

This will be the third currency conversion of the century for Venezuela.

Photo: AFP

The statement adds that "this change in the monetary scale" is based "on the deepening and development of the digital economy" in Venezuela and considers it "a necessary historical milestone at a time when the country begins the path of economic recovery." .

Despite this, it will have

a one bolivar coin and bills of 5, 10, 20, 50 and 100 bolivars

, all of them with the face of the liberator that was rebuilt in 2012 on the obverse and an allusion to the battle of Carabobo, key in independence, on the reverse.

"The introduction of the digital bolivar does not affect the value of the currency, that is, the bolivar will not be worth more or less, only that to facilitate its use

a simpler monetary scale is being carried out

," adds the information.

The objective is to "maintain the inclusion" of all Venezuelans "and attend to their transaction needs throughout the national territory."

The president of Venezuela, Nicolas Maduro.

Photo: EFE

For this reason, they emphasize that the BCV "will continue to attend to the issuance of the bolivar in its physical expression."

"

The physical bolivar and the digital bolivar will coexist

in a process aimed at rescuing their strength and their benchmark as an expression of our economy," the information added.

Due to the devaluation of the current sovereign bolivar, the banknotes had practically disappeared in their entirety, since the one with the highest denomination, the one million bolivar, was worth about 25 cents on the dollar.

Due to this, Venezuela is experiencing a

process of transactional dollarization

, so the US currency is the majority when making payments with cash.

If you wanted to pay in bolivars, most payments were made by card or with automatic transfers through a platform called Mobile Payment.

However, one of the biggest problems with this type of payment is due to

poor Internet service in the country

, which, on many occasions, makes it impossible to pay through these platforms and even the use of dataphones.

The BCV added that "the reference exchange rate will continue to be the one determined by the Venezuelan exchange market system."

Finally, he explained that the modernization of payment systems "aims at expanding the use of the digital bolivar immediately, making it easier for transfers between clients of different banks to be received in a few seconds with the highest international quality standards."

"The government, together with the BCV, will continue to

protect and guarantee monetary sovereignty

in order to promote the recovery of our economy and make the independence of our country impregnable against local and foreign factors that attack Venezuela."

With information from the AFP and EFE agency

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Source: clarin

All news articles on 2021-08-05

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