Part of the Business terms glossary:

Dollarization is the adoption of a foreign country’s currency as legal tender for monetary transactions.

Unofficial dollarization means that citizens prefer the foreign currency for some transactions, although it may not be legal tender. Official dollarization means that the foreign currency becomes the preferred tender within the country, while the domestic currency may also be accepted. 

The usual reason for dollarization is to substitute a more stable currency for a less stable one. Dollarization frequently involves the United States dollar, although it can be based on other currencies, such as the euro.  Countries that use the U.S. dollar include El Salvador, Ecuador, the Marshall Islands, Micronesia, Palau, and the British Virgin Islands.

 

This was last updated in July 2013
Contributor(s): Ivy Wigmore
Posted by: Margaret Rouse

Related Terms

Definitions

  • key risk indicator (KRI)

    - A key risk indicator (KRI) is a metric for measuring the likelihood that the combined probability of an event and its consequence will exceed the organization's risk appetite and have a profoundly ... (SearchCIO.com)

  • Predictive Index (PI)

    - The Predictive Index (PI) is a theory-based, self-report measurement of normal, adult, work-related personality that has been developed and validated for use within occupational and organizational ... (WhatIs.com)

  • How to write a business case document

    - A business case document is a formal, written argument intended to convince a decision maker to approve some kind of action. This guide explains what to include in a business case document, how to ... (WhatIs.com)

Glossaries

  • Business terms

    - Terms related to business, including definitions about project management and words and phrases about human resources, finance and vertical industries.

  • Internet applications

    - This WhatIs.com glossary contains terms related to Internet applications, including definitions about Software as a Service (SaaS) delivery models and words and phrases about web sites, e-commerce ...

Ask a Question. Find an Answer.Powered by ITKnowledgeExchange.com

Ask An IT Question

Get answers from your peers on your most technical challenges

Ask Question

Tech TalkComment

Share
Comments

    Results

    Contribute to the conversation

    All fields are required. Comments will appear at the bottom of the article.