What Countries Use US Dollars? Areas Where Greenbacks Are King
It comes as no surprise that the United States of America isn’t the only country on this planet where the dollar has power. It’s no wonder it is nicknamed the “almighty” dollar, the US treasury imparts a ton of influence on a global scale. The dollar is regarded as the unofficial business currency of the world, and many nations incorporate it into their monetary system in different ways.
In this brief overview we’ve listed the countries that only use the US dollar, incorporate it alongside their native currency, and accept it along with other foreign currencies.
A BRIEF HISTORY OF THE US DOLLAR
The New World Currency
Towards the end of the Second World War (WWII), the most influential currency in the world was actually the British Pound, due to it being heavily associated with international trades. Once the war has been ceased, the value of the British pound fell alongside a weakened British Empire. Since the world sought a new ultra-currency to do international business with, the US dollar entered the scene as a potential candidate. Many nations around the globe saw the appeal of the US dollar, since it featured moderate historical stability and was backed by a physical reserve of gold.
Not long after the war was over, countries that were attracted to the American monetary system tied the US currency into their exchange rates. Since stable economies and politics play such a large role in foreign exchange practices, many countries continued to support the US dollar even after it was no longer tied to gold.
The Modern Day Dollar
Even right now, the US dollar maintains its reputation as well as its relatively stable value. In the modern day climate, another advantage to using the US dollar globally is its acceptance rate. There are many large nations with heaps of wealth, such as China or Russia, that have very limited avenues to conduct transactions in yuan or ruble worldwide. As a result, a vast number of Asian business exchanges are conducted in US dollars.
WHICH COUNTRIES USE THE DOLLAR AS THEIR MAIN CURRENCY
When talking about what countries have dollars, it’s important to consider their level of adoption. There are a large number of countries that utilize the US dollar to some degree, but only a handful of those nations label it as their solo currency.
Countries That Solely Use The US Dollar
While these countries are obviously not a direct part of the United States of America, they are linked back to the nation in some way. Many of these places are either American-owned territories or have been claimed under European ruling in central and North/South America.
- The 50 official states of the US
- Caribbean Islands (owned by either US, British, Netherlands, or Spanish rule)
- Virgin Islands (as an insular area territory owned by the US)
- El Salvador
- US unincorporated territories
- Guam, Puerto Rico, Northern Mariana, American Samoa
- British overseas territories
- Turks and Caicos, British Virgin Islands
Countries That Have Adopted The US Dollar
A few countries, whether politically or economically, have decided to incorporate the US dollar into their national dual-monetary system as an alternative to their native currencies. In any case, these countries will typically feature American paper money alongside native metal coins. Of course, you can expect the US dollar to be widely acceptable anywhere within these countries. Ecuador uses both their native Ecuadorian centavo along with the US dollar. Panama features the Panamanian balboa and the US dollar. And last but not least, the small developing country of Timor-Leste uses the East Timor centavo and the US dollar.
Unique Case: Zimbabwe
To some extent, one could argue that Zimbabwe has also adopted the US dollar – except they treat a large basket of nine different currencies as legal tender. While there is some favouritism shown for the US dollar in Zimbabwe due to its popularity within business transactions, the country’s monetary system also involves: the euro, British sterling, South African rand, Australian dollar, Indian rupee, Botswana pula, Japanese yen, and the Chinese yuan. In other words, there’s a whole mix of various currencies in rotation.
Countries Where The US Dollar Is Still Accepted
Now that we’ve talked about countries that introduced the US dollar into their main currency circulation, here are some places where the US dollar is still accepted even though it’s not recognized as legal government-supported tender: Cuba, Mexico, Peru, Canada, Costa Rica, Honduras, and Laos. Note that you should still try to acquire the country’s native currency if you can – making purchases with US dollars in these places are generally viewed as “unofficial” exchanges. Although you should have no problem spending US dollars in areas that are heavily influenced by tourism, like for example specific parts of Mexico or Canada.
Now that you’re familiar with countries where the US dollar continues to hold agency, check out our guide to foreign exchange abroad and tips to help save you money.
Of course, Tip #1 for saving money on currency conversions is to use a reputable and professional foreign exchange service. With Knightsbridge FX, your rate is guaranteed to beat the banks.