The U.S. dollar is the most popular global currency today (and it has been for about 70 years). In strong support for the strength of the dollar, many countries around the world have gone as far as adopting the U.S. dollar as their official or unofficial currency, further making it one of the most powerful legal tenders to own. Until World War II, the British pound sterling was the most powerful currency in the world, held most often by reserve banks. After the war, bolstered by a prosperous and productive American economy (and by a Europe in ruins), the greenback surged to popularity, far outstripping the pound. Plenty of modern global currencies – including the Venezuelan bolivar and Saudi riyal – are pegged to the dollar, meaning these countries exchange their currencies on par (1:1) with the greenback. But those are for another list. Here, we focus on countries where you wouldn’t expect to find the dollar traded as a primary currency (official or unofficial but highly used in any case). Whether it be a British territory using the dollar or a country with eight official currencies (none of which are its own), enjoy this list of 25 Countries You Wouldn’t Expect Using The US Dollar.
It’s obvious the United States uses the dollar, its currency. But why do so many other states accept the dollar as their own? Dollarization – the process of adopting the dollar as a country’s own currency – can stabilize unsettled economies due to its relatively minimal fluctuations. Also, many global commodities including oil, gold, and aid money are traded in U.S. dollars so it makes it easier for such countries (such as Gulf states) to peg their currencies to the dollar or, in the case of this list, use the dollar itself.
Proposed to be the 51st state, Puerto Rico has been an unincorporated United States territory since its acquisition in the Spanish-American War in 1898. At that time, the existing Spanish Bank of Puerto Rico changed the country’s currency from the Puerto Rican peso to the Puerto Rican dollar. By 1913, the Puerto Rican economy was fully integrated into the American and the U.S. Treasury exchanged Puerto Rican dollars for U.S. dollars, ushering in U.S. dollar use that continues over a century later.
The tropical beach and diver’s paradise in the Western Pacific, Guam is a U.S. island territory and the largest island in Micronesia. The country’s primary revenue comes from tourism, helped by a stable U.S. dollar (though Japanese tourists, a major revenue source, are spending less since yen-to-dollar adjustments). American military spending is also high on the island, making up the second largest income source.
Ecuador has had a long and tumultuous history and its currency reflects this better than most other countries on Earth. Jumping between the peso, peso fuerte, franco, peso, and finally landing on the sucre as the official currency in 1884, Ecuador’s economy tossed and turned along with the uncertainty. At the turn of this century, a major banking crisis hit the Ecuadorian economy, leading GDP to contract by 5.3%. In an effect to combat rising strife and poverty, the Ecuadorian Congress implemented various financial reforms including the adoption the U.S. dollar in 2000. Afterwards, the economy significantly stabilized and strong growth followed in the succeeding years.
During Taliban occupation of Afghanistan, there was no limit to the amount of Afghani (the currency of Afghanistan) which could be printed and circulated. The instability that followed (and the U.S. entering Afghanistan) led to many people using the U.S. dollar as their primary currency. The Afghan Central Bank reintroduced a new version of the Afghani in late 2002. Since then, use of the U.S. dollar in Afghanistan has been decreasing as more of the population takes up the new Afghani currency. (To give an idea of the instability, the Afghani was trading at 43,000 per USD in 2002. In 2009, the exchange rate was down to 45:1.)