Update: On Thursday night, Venezuela’s president extended the border closing for another 72 hours.
CUCUTA, Colombia— Until recently, Virgilio Silva was a very busy man. He works as one of the money changers who served thousands of Venezuelans who crossed into his city every day to exchange their money for Colombian pesos to buy basic goods.
Silva says he regularly bought anywhere from $2,000 to $3,000 in Venezuelan currency each day, turning a small profit on each exchange.
“Some days we even had long lines outside,” Silva said.
But all that came to a screeching halt on Tuesday, when Venezuela closed its border with Colombia in an attempt to strangle the money-exchange business. It worked. Now almost nobody has visited his money exchange house in the past 48 hours, and Silva has gotten stuck with a giant pile of Venezuelan cash that just got pulled from circulation.
“It happened very suddenly,” Silva told me, displaying a huge pile of Venezuelan 100 bolivar bills.
In a nearby warehouse Silva has an additional 10 trash bags full of Venezuelan bolivares. Each bag weighs about 20 pounds. All of them together are worth approximately $7,000—but only if he can figure out a way to exchange the worthless currency for real money.
“I accumulated that over the past five months,” Silva said. “I hope one day I will be able to redeem it.”
The mess started last Sunday, when Venezuelan President Nicolas Maduro announced his government’s decision to withdraw that the country’s largest bill, the 100 bolivar note, from circulation by the end of Thursday night. The president said the move was an effort to fight “mafia groups” who were purchasing Venezuela’s 100 bills —worth just 3 cents on the U.S. dollar— in bulk and taking them out of the country to “destabilize” Venezuela.
The Venezuelan president then shut the country’s borders to prevent the alleged mafia groups from bringing the 100 bolivar bills back into the country to deposit them in banks.
The policy created immediate chaos in Venezuela, where people rushed to the banks to deposit their cash or trade it for bills in lower denomination before the Thursday deadline.
But beyond Venezuela’s borders, the situation has left thousands of hard-working people stuck with bundles of unwanted 100 bolivar bills. In Cucuta, a city located 15 minutes from Venezuela, money traders, grocers, and even professionals who have 100 bolivar bills sitting at home are now trying desperately to trade in their money for Colombian pesos before the clock runs out.
Regular banks and exchange houses in Colombia are no longer taking the Venezuelan 100 bills. That’s forced a lot of people to try to sell their bills at cut-rate costs to shady middlemen who smuggle them back into Venezuela for a handsome profit.
“I got stuck with 400,000 bolivares (approximately $130),” said Enilce Delgado, an accountant in Cucuta who was saving money to pay for a university course in Venezuela.
Delgado said she was forced to sell her stash of 400,000 for half its market value to someone who was buying up Venezuelan bills in her neighborhood.
“Better to lose some money and get rid of that,” she said. “It will be worth shit soon.”
On the Colombian side of the border, just a short walk from a bridge that connects the two countries, people visited different exchange houses on Wednesday trying to find one that would take their 100 bills, even at a discounted price.
Few exchange houses were still accepting them, but a man in his twenties walking the street with a large backpack shouted out that he was buying the Venezuelan 100 bills for 40% of their market value.
“I have a contact who takes the bills across the border. My uncle receives the money and deposits it into his bank account,” said the money buyer, who refused to give his name fearing that he could get arrested for being part of an illegal scam.
He did, however, tell me that he was paying his “contact” around $13 for every backpack full of bills smuggled into Venezuela.
“I bought around two million bolivares ($700) yesterday,” the young man said, adding that it cost him only $270.
On Thursday, a Colombian grocer who was stuck with a big pile of 100 bolivar bills, said his “delivery man” was charging him $3 for every 100,000 bolivares ($33) he smuggled across the border. The man called a friend on the other side of the border and asked him to receive a shipment that would be sent soon.
“There’s no way around it,” the grocer said before driving off on his motorbike.
John Ospina, a money trader who operates two blocks from the border, said that the scene was even wackier on Sunday afternoon, right after President Maduro announced that the 100 bolivar bill would be pulled from circulation.
Ospina said he was approached by a Colombian shop owner who tried to sell him 2 million bolivares in 100 notes. He said he refused the offer because his business and his wife’s exchange house already had too many of the unwanted bills. But he did snap a photo of the shop owner and her piles of cash.
Now, as the initial deadline to offload the 100 bolivar bills ends, the Venezuelan government has said that it will provide an extra 10 days for people still holding onto the worthless tender. But final exchanges will only be allowed at Venezuela’s Central Bank and other, non-specified “authorized points.”
That gives an extra week to smugglers, border guards and middlemen to make some extra coin by moving bills from Colombia into Venezuela, although trade groups in Cucuta estimate that most of the unwanted bills are already back in Venezuela.
Virgilio Silva, the unlucky money trader stuck with bags of Venezuelan cash, says he prefers to do things legally. He’s holding out hope that the governments of Colombia and Venezuela will strike an 11th hour deal to allow Colombians to trade their old 100 bolivar bills before losing their savings
“I’m not going to sneak my money that I have made legally into another country,” Silva said. “I will wait to see what happens. And if we lose it, we will recover from it.”