Venezuela Prepares For Payments Chaos With Currency Overhaul

Though critics are saying Venezuela’s monetary overhaul will create chaos, the country’s president warned businesses not to slow operations during next week’s overhaul. According to Reuters, “Socialist President Nicolás Maduro announced in March that the bolivar currency would be redenominated on June 4” in an attempt “to remove three zeros from the hyperinflated economy’s prices.” The country currently has an annual inflation near 14,000 percent.

Though the central bank has been tweeting pictures of the new banknotes, which don Venezuelan historical figures, sources say that banks have not received the new bills and have not had a chance to adjust cash machines for them. Critics have warned that the plan is being implemented so quickly that “Maduro is at risk of repeating the chaos of late 2016, when the government withdrew the largest bill from circulation, sparking long lines, looting and protests that led to at least three deaths.”

Opposition lawmaker and economist Jose Guerra tweeted, “We demand that the monetary overhaul scheduled for June 4 be postponed. It’s not possible to do it well.”

However, the government is calling for businesses to “take provisions so that the monetary conversion does not affect, slow or suspend customer service, payment or billing,” according to the nation’s consumer protection agency, Sundde.

Despite the warning, some stores and bus companies already stopped accepting cash on Monday (May 28) for fear that the notes would be worthless when the new currency is introduced next week. Others are concerned that potential “problems with cash payments could lead to increased use of the already overloaded digital systems, such as bank transfers and debit card payments,” which could lead to crashing bank websites.

Antoni Zambrano, a messenger near the Colombian border, said, “There are rumors that transfers will be impossible for several days, and that would be terrible because people pay by electronic transfers.”