The United States dollar is a widely accepted currency, but did you know that some countries actually use it as their main currency?
Ecuador is one such country, where the US dollar has been the official currency since 2000. This decision was made to combat high inflation and stabilize the economy.
In fact, Ecuador is the only country in the world where the US dollar is the official currency. This has had a significant impact on the country's economy and daily life.
The use of US currency has also made it easier for tourists to travel to Ecuador, as they don't need to exchange their money upon arrival.
Countries Using USD
The US dollar is used in various countries and territories, often as a primary currency or alongside a local currency. It's widely accepted in major tourist areas, large hotels, and international shopping outlets.
The US dollar is used in several countries and territories as their official currency, including Puerto Rico, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and the US Virgin Islands. Additionally, countries like Ecuador, El Salvador, and Panama use the US dollar as their main currency.
Here's a list of some countries and territories that use the US dollar as their official currency:
- Puerto Rico
- Ecuador
- Panama
- Turks and Caicos Islands
- Guam
- U.S. Virgin Islands
- Timor-Leste
- British Virgin Islands
- Marshall Islands
- American Samoa
- Federated States of Micronesia
- Northern Mariana Islands
- Caribbean Netherlands
- Bonaire
These countries use the US dollar for various reasons, including economic stability, historical agreements, or simple practicality.
North America
North America is home to a diverse group of countries, each with its own unique currency.
The United States of America uses the United States dollar, which is also the official currency of several other countries in the region, including Puerto Rico, the US Virgin Islands, and El Salvador.
In total, 15 countries in North America use the US dollar as their official currency.
Use Their Own Currency
Some countries have their own unique currency, which is used alongside the US dollar. In Aruba, for example, both the florin and USD are accepted. The Bahamas uses their own dollar, which has a 1:1 exchange rate with the USD.
In Barbados, you'll find both the Barbadian dollar and the US dollar in circulation. Belize also uses its own dollar, alongside the US dollar. Bermuda uses their own dollar, but USD is widely accepted.
Cambodia is another country that uses its own currency, the Riel, alongside the US dollar. The Cayman Islands use their own dollar, but USD is widely accepted, especially in the tourism sector.
Costa Rica uses the Costa Rican colon alongside the US dollar. In Curaçao, the Antillean guilder is the official currency, but USD is widely accepted.
In Guatemala and Honduras, it's recommended to have some local currency, but USD is often accepted, especially in larger hotels and for bigger purchases.
Here's a list of some countries that use their own currency alongside the US dollar:
- Barbados: Barbadian dollar
- Belize: Belize dollar
- Bermuda: Bermudian dollar
- Cambodia: Cambodian Riel
- Cayman Islands: Cayman Islands dollar
- Costa Rica: Costa Rican colon
- Curaçao: Antillean Guilder
- Guatemala: Guatemalan Quetzal
- Honduras: Honduran Lempira
These countries have unique economic situations, and using their own currency can be beneficial for their local economy.
What Use the?
The US dollar is widely used across the globe, both as a primary currency and alongside local currencies. Many countries use the dollar as a stable store of value or for high-value transactions.
Some countries have officially adopted the US dollar as their currency, including Ecuador, El Salvador, and Timor-Leste. These countries use the dollar due to its stability and reliability.
The US dollar is also widely accepted in major tourist areas, large hotels, and international shopping outlets, even in countries with strong local currencies. This makes it easy for tourists to use their cash while traveling.
The following countries and territories use the US dollar as their official currency:
- Bonaire, Sint Eustatius, and Saba
- Ecuador
- El Salvador
- Palau, the Marshall Islands, and the Federated States of Micronesia
- Panama
- Timor-Leste
- Zimbabwe
In addition, many countries use the US dollar as a reserve currency, including Somalia and Fiji. This means that they hold US dollars in their central banks to trade with other nations.
The US dollar is considered one of the most stable and reliable currencies globally, making it a practical choice for countries looking to stabilize their economies.
Why USD is Used
The US dollar is widely used because it's considered one of the most stable and reliable currencies globally. This stability is crucial for territories that want to avoid the volatility and instability that comes with managing a smaller, less liquid currency.
In the third quarter of 2023, the International Monetary Fund reported that the US dollar comprised roughly 59% of global foreign exchange reserves held by central banks. This shows just how dominant the dollar is in the global economy.
Using the US dollar makes transactions with American tourists and businesses straightforward, fostering economic activity and convenience. It's like having a universal language that everyone understands.
The dollar's stability also helps countries avoid inflation and currency crises. This is especially important for countries like Panama, which can use the dollar alongside their own currency to maintain a sense of national identity and sovereignty over their monetary policy.
USD in Tourism
The USD is widely accepted in tourist areas, making it easy for Americans to spend money without needing to exchange currency. Some cities and regions even accept US dollars as legal tender, even if their national bank doesn't.
The strength of the US dollar makes it a popular choice among tourists, and it's often used to pay for services or exchanged in bulk for local currency. This convenience is especially helpful for those traveling to destinations like the Mexican Caribbean.
In the Mexican Caribbean, US dollars are widely traded among residents and can be used to pay for things like shopping, dining, and excursions.
USD Uses Around the World
The US dollar is widely used around the world, both as a primary currency and alongside local currencies. In many countries, it's accepted in major tourist areas, large hotels, and international shopping outlets.
You can use your US dollars in several countries and territories, including the US territories such as Puerto Rico, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and the US Virgin Islands. Beyond that, there are many countries that use the US dollar as currency or alongside their own.
Some countries with fixed-rate US dollar exchange include Aruba, Bahamas, Barbados, Bermuda, Macau, Hong Kong, Bahrain, and Belize. This means that the value of the US dollar is pegged to their local currency, making it easier for visitors and businesses to rely on fixed costs.
Fixed-Rate Exchange
The US dollar plays a significant role in the global economy, and its value has far-reaching implications for the health and stability of global financial markets.
Countries like Aruba, Bahamas, Barbados, and Bermuda have fixed their exchange rates to the US dollar, which strengthens trade between the two countries and keeps their economies more stable.
This fixed exchange rate also protects the stability of the US dollar, making it easier for visitors and businesses to rely on fixed costs.
By pegging their currency to the US dollar, these countries encourage more individuals and companies to invest in their economies, boosting growth and stability.
In some cases, a country's decision to fix its exchange rate to the US dollar is a response to economic challenges, such as Hong Kong's experience in 1983 when its local dollar experienced a significant decline in value.
Countries with fixed-rate US dollar exchange include:
- Aruba
- Bahamas
- Barbados
- Bermuda
- Macau
- Hong Kong
- Bahrain
- Belize
These countries are not only travel destinations for Americans but also top business destinations, making the fixed exchange rate a strategic move to attract investors and corporations.
7 Dollar Uses You Didn't Know
You can use the US dollar in several countries and territories as a primary currency or alongside a local currency. The US dollar is widely accepted in major tourist areas, large hotels, and international shopping outlets even in countries with strong local currencies.
In Aruba, the florin and US dollar are both accepted, making it a great place to use your dollar stash. The exchange rate is 1:1, so you can easily exchange your dollars for florins.
The US dollar is also widely accepted in the Bahamas, where it's used alongside the Bahamian dollar. This means you can use your dollars to pay for things like food, accommodations, and activities.
In Belize, you can use the US dollar alongside the Belize dollar, which is a great option if you're not sure which currency to use. Many businesses in Belize accept both currencies, so you can't go wrong.
In Cambodia, the US dollar is used alongside the Cambodian riel, which can be a bit confusing. But don't worry, US dollars are widely accepted, especially in tourist areas like Siem Reap and Phnom Penh.
In Costa Rica, the US dollar is commonly accepted, especially in the tourism sector. This is great news for travelers who don't want to exchange their dollars for colones.
In Saint Kitts and Nevis, the Eastern Caribbean dollar is the local currency, but US dollars are widely accepted by most stores. Just be aware that you'll receive change in Eastern Caribbean dollars, so you may need to exchange some of your dollars to get local currency.
Frequently Asked Questions
Why do Turks and Caicos use USD?
Turks and Caicos uses the US dollar as its official currency to attract tourists and businesses, making it a popular destination in the Caribbean. This strategic decision also eliminates the need for sales tax.
Where is the U.S. currency the strongest?
According to current exchange rates (2024), the U.S. dollar is strongest against the Polish złoty (1 USD = 4.09 złoty). This makes Poland an attractive destination for travelers on a budget.
Sources
- https://stripe.com/resources/more/which-countries-use-the-us-dollar-heres-a-complete-list
- https://www.geeksforgeeks.org/north-american-countries-and-their-currencies/
- https://www.cntraveler.com/gallery/countries-that-use-the-us-dollar
- https://blog.remitly.com/finance/what-countries-use-dollars/
- https://www.thrillist.com/travel/nation/countries-that-use-us-dollar-currency
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