The four economists wanted to create a new currency that was stable, dependable and trustworthy. The only catch: This currency would not be real. No coins, no bills. It was fake.
“We called it a Unit of Real Value — URV,” Bacha says. “It was virtual; it didn’t exist in fact.”
People would still have and use the existing currency, the cruzeiro. But everything would be listed in URVs, the fake currency. Their wages would be listed in URVs. Taxes were in URVs. All prices were listed in URVs. And URVs were kept stable — what changed was how many cruseros each URV was worth.
Say, for example, that milk costs 1 URV. On a given day, 1 URV might be worth 10 cruseros. A month later, milk would still cost 1 URV. But that 1 URV might be worth 20 cruzeiros.
The idea was that people would start thinking in URVs — and stop expecting prices to always go up.
“We didn’t understand what it was,” says Maria Leopoldina Bierrenbach, a housewife from Sao Paulo. “I used to say it was a fantasy, because it was not real.”
Still, people used URVs. And after a few months, they began to see that prices in URVs were stable. Once that happened, Bacha and his buddies could declare that the virtual currency would become the country’s actual currency. It would be called the real.
“Everyone is going to receive from now on their wages, and pay for all the prices, in the new currency, which is the real,” Bacha says. “That is the trick.”