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

Venezuela ordered a new currency reconversion, the third of this century, which remove six zeros from the bolivar, the local currency hit by high inflation and whose value collapsed to make way for the use of the dollar. In turn, the Central Bank announced on Thursday that it will implement a new currency, known as the digital bolivar.

“As of October 1, 2021 The Bolivar Digital will come into force, by applying a monetary scale which deducts six (6) zeros from the national currency. In other words, all monetary amounts and everything expressed in national currency will be divided by one million (1,000,000), ”the banking entity said in a statement.

In 2007, Venezuela undertook a first process of reconversion by eliminating three zeros from the currency which It has become the strong bolivar. In 2018, another process ended with the birth of the current sovereign bolivar, which removed eight other zeros from the currency.

The statement added that “this change in 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 is embarking on the path of economic recovery “. .

Despite this, you will have one bolivar coin and 5, 10, 20, 50 and 100 bolivar banknotes, all with the face of the liberator rebuilt in 2012 on the obverse and an allusion to the Battle of Carabobo, key to 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 to facilitate its use a simpler monetary scale is underway“adds the information.

The objective is to “maintain the inclusion” of all Venezuelans “and to meet their transaction needs throughout the national territory”.

For this reason, they stress that the BCV “will continue to witness the delivery of the bolivar in its physical expression”.

“The physical bolivar and the digital bolivar will coexist in a process aimed at saving its strength and its reference as an expression of our economy, ”added the information.

Due to the devaluation of the current sovereign bolivar, the banknotes had practically all disappeared, since the one with the largest denomination, the million bolivar, was worth around 25 cents per dollar.

For this reason, Venezuela is experiencing a transactional dollarization process, so the US currency is the majority when making cash payments.

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

However, one of the biggest problems with this type of payment is due to the poor internet service in the country, which, on many occasions, makes payment via these platforms and even the use of dataphones impossible.

The BCV added that “the reference exchange rate will continue to be that determined by the Venezuelan foreign exchange market system”.

Finally, he explained that the modernization of payment systems “aims to immediately extend the use of the digital bolivar, making it easier for transfers between customers of different banks to be received within seconds with the highest international quality standards”.

“The government, with the BCV, will protect and guarantee monetary sovereignty in order to promote the recovery of our economy and make our country’s independence impregnable in the face of local and foreign factors attacking Venezuela. “

With information from the AFP and EFE agency