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A currency union (also known as monetary union) involves two or more "states sharing the same "currency without them necessarily having any "further integration (such as an "economic and monetary union, which would have, in addition, a "customs union and a "single market).

Three types of currency unions exist:

  1. Informal – unilateral adoption of "foreign currency["citation needed]
  2. Formal – adoption of "foreign currency by virtue of bilateral or multilateral agreement with the "issuing authority, sometimes supplemented by issue of local currency in "currency peg regime
  3. Formal with common policy – establishment by multiple countries of a common "monetary policy and "issuing authority for their common currency

The theory of the "optimal currency area addresses the question of how to determine what geographical regions should share a currency in order to maximize economic efficiency.


List of currency unions[edit]


Currency Union Users Est. Status Population GDP (nominal $)
"CFA franc Issued by the ("French) "Overseas Issuing Institute between 1945−1962 then by the "Central Bank of West African States and the "Bank of Central African States  "Benin
 "Burkina Faso
 "Côte d'Ivoire
 "Central African Republic
 "Republic of the Congo
 "Equatorial Guinea
1945 Formal, common policy 151,978,440
"CFP franc Issued by the ("French) "Overseas Issuing Institute  "French Polynesia
 "New Caledonia
 "Wallis and Futuna
1945 Formal, common policy 552,537
"Eastern Caribbean dollar "Eastern Caribbean Currency Union of the "OECS  "Anguilla
 "Antigua and Barbuda
 "Saint Kitts and Nevis
 "Saint Lucia
 "Saint Vincent and the Grenadines
1965 Formal, common policy
de facto "EMU for "CSME members[1]
"Euro "International status and usage of the euro "European Union "Eurozone:


and "EU special territories:
"United Kingdom "Akrotiri and Dhekelia (SBAs)
 "French Southern and Antarctic Lands
 "Saint Barthélemy
 "Saint Pierre and Miquelon

 "San Marino
  "Vatican City

1999/2002 Formal, common policy and "EMU for EU members
Formal for Monaco and "SBAs (those form a de facto EMU with the Eurozone)
Formal for Andorra since 2011
Informal for Kosovo, Montenegro
Formal for the rest
"Hong Kong dollar  "Hong Kong


1977 Informal; Decreto-Lei n.º 16/95/M prohibiting the refusal of the pataca by merchants and businesses.[2] 7,775,200
"Singapore dollar

"Brunei dollar

Managed together by the "Monetary Authority of Singapore  "Brunei


1967 Formal; currencies mutually exchangeable[3] 5,137,000 36,438,000,000
"Armenian dram  "Armenia


1994 Informal 3,368,900 18,715,000,000
"Australian dollar  "Australia

and "external territories:
"Australia "Ashmore and Cartier Islands
"Australia "Australian Antarctic Territory
 "Christmas Island
 "Cocos (Keeling) Islands
"Australia "Coral Sea Islands
"Australia "Heard Island and McDonald Islands
 "Norfolk Island


1966 Informal 24,557,000
"Pound sterling "Sterling area (former)  "United Kingdom

and "overseas territories:
 "British Antarctic Territory
 "British Indian Ocean Territory
 "Falkland Islands
 "Saint Helena, Ascension and Tristan da Cunha
 "South Georgia and the South Sandwich Islands

and "crown dependencies:
 "Isle of Man

1939 Semi-formal. UK banknotes are legal tender in locations outside the UK. Local currencies are pegged to the GBP but not necessarily accepted in the UK: "Guernsey pound, "Manx pound, "Jersey pound and "Alderney pound, "Falkland Islands pound, "Gibraltar pound, "Saint Helena pound 62,321,000
"Indian rupee  "India


1974 Informal

Nepal minor usage

"New Zealand dollar  "New Zealand

and "realm:
 "Cook Islands

 "Pitcairn Islands

1967 Informal 4,411,000
"Israeli new sheqel  "Israel


1927/1986 Informal 11,738,000
"Jordanian dinar["citation needed]  "Jordan

 "Palestine ("West Bank only)

Informal 8,922,000
"Russian ruble  "Russia

 "South Ossetia

2008 Informal 142,177,000
"South African rand "Multilateral Monetary Area  "Lesotho

 "South Africa

1974 Formal
de facto "customs and monetary union for "SACU members
52,924,669 316,936,000,000
"Swiss franc  "Liechtenstein


1920 Informal
since 1924 creation of a "customs union and "common market in "EFTA in a de facto "EMU
7,774,546 497,171,000,000
"Turkish lira  "Turkey

 "Turkish Republic of Northern Cyprus

1983 Informal 75,081,100 734,043
"United States dollar  "United States

and "insular areas:
 "American Samoa
 "United States Minor Outlying Islands
 "Northern Mariana Islands
 "Puerto Rico
 "United States Virgin Islands

 "El Salvador
 "Marshall Islands
 "Federated States of Micronesia
 "Turks and Caicos Islands
 "British Virgin Islands
"Netherlands "BES islands


(Panama only)

Formal for insular areas and sovereign status with "Compact of Free Association,[6] informal for other areas 339,300,000

Note: Every "customs and monetary union and "economic and monetary union also has a currency union.

 "Zimbabwe is theoretically in a currency union with four blocs as the South African rand, "Botswana pula, British pound and US dollar freely circulate, the US Dollar was until 2016 official tender. [1].

Currency unions

Additionally the "autonomous and "dependent territories, such as some of the "EU member state special territories, are sometimes treated as separate "customs territory from their mainland state or have varying arrangements of formal or de facto "customs union, "common market and currency union (or combinations thereof) with the mainland and in regards to third countries through the "trade pacts signed by the mainland state.[7]


Community Currency Region Target date Notes
"Bolivarian Alternative for the Americas "SUCRE Latin America
? It is planned to begin as an electronic currency involving all countries of the "Bolivarian Alliance for the Americas.
"East African Community "East African shilling Africa 2012 (not met), 2015 (not met), 2024[8]
"West African Monetary Zone "Eco Africa 2020[8] Inside "Economic Community of West African States, planned to eventually merge with "West African franc
"ASEAN+3 "Asian Monetary Unit["citation needed] Asia ? a "free trade agreements matrix partially established
"Cooperation Council for the Arab States of the Gulf "Khaleeji Arabian Peninsula c. 2013-2020[9][10] "Oman and the "United Arab Emirates do not intend to adopt the currency at first but will do at a later date.


Never materialized[edit]

See also[edit]


  1. ^ "Anguilla and "Montserrat are members of OECS currency union, but not of the CSME.
  2. ^ http://www.marcasepatentes.pt/files/collections/pt_PT/1/2/14/CPI%201995.pdf Decreto-Lei n. 16/95/M
  3. ^ To all intents and purposes a monetary union. They are the last two nations whose dollars have remained at par and mutually interchangeable since the days when the "Spanish Dollar was the united currency of large areas of the "New World and "South East Asia.
  4. ^ alongside the "ngultrum
  5. ^ Not official, but freely used as a tender in Nepal, due to primarily the economic flux with India and also the instability caused by that country's civil war.
  6. ^ "Compact- Title 02 Article 05". www.fsmlaw.org. 
  7. ^ EU "Overseas countries and some other territories participate partially in the EU single market per part four of the Treaty Establishing the European Community; Some EU Outermost regions and other territories use the "Euro of the currency union, others are part of the "customs union; some participate in both unions and some in neither.
    "Territories of the United States, "Australian External Territories and "Realm of New Zealand territories share the currency and mostly also the "market of their respective mainland state, but are generally not part of its "customs territory.
  8. ^ a b Asongu, Simplice; Nwachukwu, Jacinta; Tchamyou, Vanessa (2016-08-01). "A Literature Survey on Proposed African Monetary Unions". Journal of Economic Surveys: n/a–n/a. "doi:10.1111/joes.12174. "ISSN 1467-6419. 
  9. ^ "Kuwait sees GCC currency union taking up to 10 years". arabianbusiness.com. 
  10. ^ www.dunatv.hu (in Hungarian)
  11. ^ a b Bolton, Sally (10 December 2001). "A history of currency unions". guardian.co.uk. Retrieved 26 February 2012. France persuaded Belgium, Italy, Switzerland and Greece 
  12. ^ Not currently on any political agenda, based mostly off conspiracy theories.

Further reading[edit]

External links[edit]

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