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Countries That Use the US Dollar

Whether or not you travel regularly, it may come as a surprise to you to discover that there are tens of countries that use the US dollar as one of their main currencies. Of course, some of these countries also have their own currency, but others don’t, relying solely on the US dollar to process transactions within their borders.

Which countries use the US dollar? And why do they prefer a foreign currency over their own? We will answer all these questions and more in this article, so keep reading.

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10 Countries That Adopted the US Dollar as Their Currency

1. Zimbabwe

Surprisingly, the first country on our list is landlocked Zimbabwe in Southern Africa, which is home to 15 million people. In the early 2000s, Zimbabwe was subject to government-driven hyperinflation, which led to the creation of the 100 trillion dollar note in 2008. To stop the madness, the Zimbabwean dollar was suspended in 2009 and temporarily replaced by the currencies of neighboring countries.

Zimbabwe tried to introduce a new currency in 2013 and 2023, but those too failed, and eventually, in 2015, the USD became the official currency in an effort to end the social unrest in the country.

2. Ecuador

Ecuador is a country that has been familiar with economic and political crises for decades, and after hyperinflation in the 90s, it switched to the US dollar in 2000. While this has helped stave off some of the economic crises, the country is still deep in the throes of political unrest.

3. El Salvador

Prior to 2001, El Salvador used their local currency, the Colon, for all transactions. This currency was subject to massive inflation; however, shortly after Ecuador adopted the US dollar in 2000, El Salvador did the same.

Related: Bitcoin Adoption Expands in South America

4. Turks and Caicos Islands

Turks and Caicos Islands are unique because they are a country that never established or printed their own currency. Rather, they have always used the currency of other countries. First, they used the Jamaican pound, then the Jamaican dollar, before permanently switching to the US Dollar in 1973 for ease of business reasons.

5. Panama

Panama is another country that never truly created its own currency. In 1904, after winning independence from Colombia, they created the Balboa, which was pegged to the US dollar on a 1:1 ratio, ensuring that the local government didn’t need to invest in economic study or policy maintenance.

Over the years, the use of the Balboa has faded in favor of the US dollar since they are 100% interchangeable and this allows Panama to skimp on its own money production and allow another country to do it for them.

6. Palau

Palau is a collection of islands near Micronesia which has been under the rule of various countries since its discovery. After finally winning their freedom in 1994, Palau adopted the US dollar as their currency to keep things simple rather than undertaking the arduous process of forming their own currency.

7. Timor-Leste

Timor-Leste are two islands, which similar to Palau, were under the rule of a large number of countries over the years. When they finally won their independence in 2000, the US dollar became the official currency to make things easy for the new country to get established. Other currencies, however, such as the Indonesian Rupee and Australian dollar, are frequently accepted at businesses and tourist locations.

8. British Virgin Islands

The British Virgin Islands, strangely enough, adopted the US dollar as their official currency in 1959. They did so because, while the British pound was the currency of the UK(their ruling country), their proximity to the US made it too difficult to do business, so they swapped to the US dollar instead.

9. Bonaire

Bonaire was formerly a colony of the Kingdom of the Netherlands, thus using the Gilder. After the Netherlands entered the EU in 1999 and adopted the Euro, it became more and more difficult for Bonaire to manage its own currency. Due to its proximity to the United States, Bonaire adopted the US dollar as its official currency in 2011.

10. Micronesia

Micronesia gained independence in 1944, and like Palau and the Marshall Islands, the country decided not to form its own central bank, opting instead to use the US dollar and other currencies in proximity (Indonesian Rupee). This made it easy for Palau and Timor-Leste to do the same when they gained their independence from Micronesia later.

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9 Countries Which Accept USD Next to Their Own Currency

Several countries over the years have begun accepting the US dollar on top of their regular currency. This is to provide some economic stability as local currencies fail and economic situations worsen. Several of these countries could officially adopt the US dollar in the coming years as political unrest worsens and their local currency becomes even more inflated by corrupt governments.

Of course, some countries on this list accept the US dollar because of the large number of Americans living on their soil or because it is simply easier for tourists. We’ve marked those ones to set them apart from those countries experiencing political and economic issues.

·      Cambodia

·      Caribbean Netherlands (ease of business)

·      Somalia

·      Belize (ease of business)

·      Costa Rica (ease of business)

·      Nicaragua

·      Myanmar

·      Liberia

Related: Cryptocurrency and Inflation

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Why Do Some Non-US Countries Use the US Dollar?

Currency is a complicated aspect of government. In the United States, there are several economists who advise those in power when to print money, and when to raise interest rates in order to control inflation and ensure stability for citizens.

If this sounds complicated, it's because it is. As a result, many smaller nations have decided to use the US dollar and the economic services that come with it rather than printing their own currency. As you can see by our list above, many of the countries listed are tiny, and leaving the currency management to someone else makes it easier for their country to stay afloat and for the government to worry about other issues.

Obviously, there are some larger countries on the list, and these countries, use the US dollar usually because their own currency is corrupt or subject to massive inflation. Some of the countries listed officially use the US dollar, while others use it as a secondary currency to their own, making it easy for tourists who visit.

It’s important to note that there are several countries that aren’t on this list that also prefer to transact in US dollars because of corruption or civil unrest reasons. However, they didn’t make our list as the US dollar isn’t officially in use in these places, though you probably can get by.

Additionally, not on our list are countries that have become US territories and, as such, have adopted the US dollar as their currency.

They are:

·      Puerto Rico

·      Guam

·      America Samoa

·      U.S. Virgin Islands

·      Commonwealth of the Northern Mariana Islands

·      Marshall Islands

We hope this has been informative and taught you something you didn’t know about global uses of the US dollar.

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